That's pretty fricking neat!
Other people have talked about hacking an optical mouse, but I don't think anybody's ever actually done it before. Congrats to you!
I can see a lot of potential there, you could get more resolution just by putting a large washer on the bolt head, and mounting the mouse further from the central axis, so that the washer would be the part the optic sensor "sees". More surface would pass the optic sensor for each turn of the knob that way.