This is a resistive analog joystick, very similar to those found on the PSP1000. These compact joysticks are different in that they have a very interesting 'slide' feeling. There are two resistive outputs - one for each axis, and no select button as found on the larger Thumb Joystick. If you supply power to pins 2 and 4, you can use an ADC to read the other two pins for the x and y axis values.

The cap is removable, and is covered with a 'sticky' material so your thumb won't slide off.

The pads are spaced by 2mm, but it is possible to get our 2.54mm headers connected with a bit of bending. We're trying to get a breakout board put together. Should be available soon!

SFE Eagle Library has this part!