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Welcome Skybird0,
The sensor housing is your VSS - vehicle speed sensor and I also believe is tied to the ABS if you have it. If not, its just straight-up vehicle speed. There's a tone ring on the end of the pinion shaft.
 

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Thanks for the replies! @RyanD1966 that seems to be it. Is it possible to service it without removing the differential and axle?
@Zogg Thanks for the tip. I figure I'll go ahead and replace it since it seems worn out.
Skybird, can't honestly say, I've got a second Gen and never owned a first. That axle's completely different. Hopefully one of the first Gen boys'll ring in.
 
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