I am planning to create a motor turret described in this question. But to simplify the problem, I'm thinking of a wind turbine with a generator in the main head that can rotate freely through 360 degrees to face the wind. How would I prevent the power and sensor wires coming from the head and down the shaft from twisting?
What you're looking for is generally referred to as a slip ring. Here's a cheaper slip ring sold by Adafruit along with a video demonstrating how it works: http://www.adafruit.com/products/736. They sell hobbyist parts. I've used slip rings before to manufacture my own rotating LiDAR using a Hokuyo.
Here's another company that sells what seem to be industrial grade slip rings: http://www.moflon.com/. I found them by doing a quick Google search for "slip ring connector", which you can use to find many many more options.
As a final note, here's the video of the rotating LiDAR I built which uses a slip ring...you will see the slip ring in the first 30 seconds of the video: https://www.youtube.com/watch?v=7PLcqhXVndI&list=UU0A5iVxngtVcHPjANH75z1A.
Two approaches come to my mind.
The first one is brush connectors, these for example: http://www.mercotac.com/html/products.html
The second one would be to use something like audio connector for example http://www.trait-tech.com/uploads/details/T-PCA-7034-1__2-5-to-3-5-Adapter-Audio-Connector-Plug-Converter.jpg If this isn't smooth enough for your application, there are conductive greases you can find appropriate. Be careful to separate plastic parts so that they don't make the connection rough.