It is very simple. There are three connections on a standard 1/8" stereo headphone plug. The ring (contact nearest the wire) is GND, the tip is SIGNAL and the middle contact is SHIFT. Shift is just a switch to GND which closes when you push in on the seek ring (don't know what else to call it). Signal is just a resistor to GND. The resistance depends on which button you're pressing. No buttons pressed is infinite resistance. The values are:

Resistance	Button
0	OFF
2.2k	SOURCE
4.4k	MUTE
6.6k	LIST(DISP)
8.8k	SEEK DOWN
12.1k	SEEK UP
16.8k	VOLUME DOWN
23.6k	VOLUME UP
33.6k	SELECT
48.6k	MODE

(up/down assume stick is pointing to the right)
There are no active components in the stick, it's just switches and resistors.