The Secret Behind the iPod Scroll Wheel
Grump sent in a story saying "Ask any iPod user what they like the most about their device, and most will probably mention the scrollwheel. Here is the story behind the company that makes it (hint: it's not Apple). Great not just for the history, but insight as to both how Apple's design process works, and how the scroll wheel itself works."
25 years ago, Tektronix graphic terminals had scroll-wheels for cursor movement (this was before mice became widespread). And Hewlett-Packard had an innovative scrollwheel that was usable in both directions (in conjunction with the cursor keys) on the 9836 series desktop computers.
You can get more information on the geeky side from http://www.synaptics.com/technology/cps.cfm
That's not a clickwheel, it's a thumbwheel. Sony actually has a patent on clicking thumbwheels in Japan. But anyway, the problem with thumbwheels is the same as mouse wheels, you have to "pedal" the thing to go through long lists. That is, you have to remove your thumb from the wheel when you've scroll all the way one direction, then put your thumb back on at the other end and scroll again.
It works, but in very long lists it is noticeably inferior to a circular wheel you can stay on. Try scrolling through your list of all songs on your Rio. It doesn't work well, and this is proably why the Rio has you select the first letter of the song first and then go to the list (at least the Karma does).
Cheers! Yes, that is pretty much how I was thinking it worked.
Aside: I remember having an old Sony Trinitron 14" TV once, and it had a similar system for changing channel. It was very annoying if a fly decided to walk across the buttons, because the channels would change as the fly walked across!