On the S4/S6 (and many other 90's era Audis) the cam position sensor is only used during startup to tell the engine when the compression stroke occurs. from then on out, the speed sensor (flywheel tooth counter) and reference pin sensors take over. The result is that if you have a flaky cam position sensor, the car will sometimes not start until a signal is sent from the G40 CPS.
The CPS is a hall sender, which works by producing a ground pulse every time the "window" on the shutter wheel behind the camshaft exposes the hall sender to the receiver. this pulse is then received by the ECU to tell it when the compression stroke is occuring.
To "see" this pulse, you can connect an LED between the 5v supply and signal pins of the connector, which on the UrS4/S6 is pin 1 for 5v, and pin 2 for signal. Use a standard 2v LED, NOT the 12v LEDs with a built in resistor.
LED's are directional, where the longer leg needs to be connected to the positive side, shorter leg to negative. So connect the longer leg to pin 1 (5v) and the shorter leg to pin 2 (signal). On our CPS tester we mount the LED by drilling holes in the male 3 pin connector and pulling the legs of the LED through the holes so the lamp is effectively surface mounted to the connector. The result looks like this:
If you'd like to purchase a pre-made test harness, click here.