theatrus
100-mile-commuter
The way that these sensors work is typically there is a tiny prism reflecting an LED light back onto a sensor that diffracts when submerged if I recall correctly, so you are correct you only will get a few millimeters of resolution. (Which can be a good thing, depending on application ) This is same concept as Tunze osmolator ATO uses to know when to top off.
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Yeah, just no prism but usually just using the change in refraction from the water hitting the dome. They're very reliable.
The Spectrapure UPLC appears to use a pressure sensor connected by airline tubing. I haven't cracked mine open to see exactly how it's setup or what sensor they use (cause I kinda want it to always work ). It can give about 4-5inches of water level difference for the on/off pump control.