Usually on the vehicles I work on, the cam position sensor is usually destroyed by a syncronizer that has gone bad. Think of it as the lower end of a distributor .. that's all it is with a sensor instead of a rotor and cap on top.
It's pretty much a Ford only item as far as I know and Rakel is right about it needing to be timed or check engine
light and fuel economy/power issues will possibly result.
This is also only for the 3.8 mustang motor, the 5.0 uses a sensor too for the 94-95? model year if I remember (either that or used a distributor)
The 4.6 is plugged into a hole in the front cover and doesn't need one.