Arduino best way to control external potentiometer of device
How about using a continuous rotation encoder for manual control and using LEDs for indication purpose. Digikey has some of those rotary encoders:

http://www.ttelectronics.com/sites/default/files/download-files/Datasheet_RotaryEncoder_EN12Series.pdf

http://www.digikey.com/product-detail/en/tt-electronics-bi/EN12-HN22AF18/987-1193-ND/2408771

These can be rotated continuously and will give you certain number of pulses per revolution. When manual control us desired, you can capture the rotation using arduino and light up certain number of LEDs to indicate the current level. Once full level has been achieved, rotation in that direction will have no effect. However once user starts rotating in opposite direction, you go ahead and turn off LEDs in sequence to give a feedback for level reduction. Once minimum level has been achieved, rotation in that direction will have no effect.

When automatic control is desired, you can simply set the level and light up that many LEDs to give level indication.