I put a Love controller into my keezer collar. Didn't bother to insulate it, but I did put it roughly inside one of those blue plastic electrical boxes, just to try to give it a little protection from splashes, things hitting it, etc. Here are some pics (sorry for the size and quality).
Condensation would only really be a problem if there was a lot of moisture too, which in my case there isn't. I've never seen a hint of water on the controller, inside or out.
Also, the mounting of this thing was probably the hardest part of my keezer project. I basically mitered out a VERY rough opening with my drill and a small saw, then used a dremmel to sand it down so that the controller would fit snug. It also came with a mounting bracket thing, which I also used to sort of plug up the hole where I dremmeled a little too much. This brings back memories of what a PITA that project was... Good luck!