It's the Profile Ignition Pickup, and it's located in your distributor.
I had to replace mine because it came loose, and was moving around inside, causing the car to run rough when it warmed up. It wasn't moving much, but any movement is too much. To change it, you need to remove the entire distributor assembly, and pull the drive gear off the shaft. Time consuming, but fairly simple. To see if it's loose, remove the cap, and rotor and you can use a screwdriver to see if the PIP is loose. I have no idea how you would check if it's working properly if it's not loose though.
Note: The PIP on my 95 GT was actually a 95 Cobra part, and not similar to each other at all in shape/size.