I'm going to be using this to determine exact position of a cam driven by a motor. Quadrature feature won't tell me position, just speed and direction so I figured I could use 4-bit hex code output.
How do you read 4-bit hex code with an Arduino? Is there a library for it?
The part you describe actually outputs position. It outputs it using 4 pins, that are to be read as a 4-bit value (0 to 15). This gives you 4-bit resolution in determining angle (360 degrees/16 = 22.5 degree resolution).
To interface with the Arduino, you will need to use 4 digital inputs. After reading the 4 inputs, you can compute the 4-bit position.
int position = pinval_1 || (pinval_2 << 1) || (pinval_3 << 2) || (pinval_4 << 3);
the variable 'position' will now be a number between 0 and 15, which you can multiply by 22.5 degrees to get your position relative to a zero-position (or home-position which should read as 0000).