What is a Camshaft Sensor?

A bloke who sensors wild cams and makes them behave?

Or maybe you mean that the cam has the ignition timing sensor attached?

A camshaft censor? "This cam contains scenes of graphic violence and some sexual swearwords."

It senses the position of rotation of one of the camshafts (ie, when a certain valve is open). I'm not sure about OEM uses, but aftermarket engine management systems use them for sequential timing of the fuel injectors.

No, not really.

I am guessing it senses the position of the camshaft so the electromagics in the car can tell how far round the camshaft is and which cylinder to inject fuel into, which ones to stick a spark to and perhaps what RPM the engine is doing.

They break sometimes, and some engine managements need them more important than others.

Brain fart.