These digital verniers are as cheap as chips now anyone tried using them as position sensors? I was thinking of a system to measure suspension travel to see how much it moves in corners.

I find a bit of wooden dowel a bit of plastic pipe and a tie wrap very good for such things!

tried the cable tie roung the damper shaft trouble is it only shows the maximum and I'd like to know how it varies around the circuit.

the liniar VR i costed were either an arm and a leg or rubbish. Where can I get reasonable ones with proper connectors and some means of connecting them engineered in?

A linear VR with about 75mm of travel should only cost a couple of quid. Logrithmic scale ones are used in audio equipment and are cheap (Don't go for Penny and Giles ones, as they are not). Try Maplins. You may even get linear scale ones, but if not just calibate accordingly.
Long time since I played with this type of gear. Hope this is of some help.

Why not just a common rotating potentiometer (the kind that you turn a knob to turn the volume up etc) with a lever on it? Hook that to a multimeter with a logger and youre set. With a good meter you could even set up 2 at a time.