for those who actually want to know how it works, just do a search on wikipedia for how the wiimote figures out what you're pointing.
for projectors, i've read that people rig the setup using 2 sensor bars and block out the LEDs in the center of the 2. this increase the angle and thus changes the sensitivity. and since it's really just detecting infrared, candles work too. i have never tried this myself, however.
all that is just for horizontal movements, however. for vertical movements, i believe it really is just a guess that i suppose comes from knowing 1) 4:3 or 16:9 2) middle of the sensor bar (or midpoint of 2 candles) and assuming 3) the sensor bar is only inches above or below the screen (above or below is a setting in the Wii which you can modify of course). the resulting guess as you can imagine, is excellent.
look, don't bash the wiimote--it's great engineering, period. also, i imagine it would be easy to have SPOT-ON precision--you just need to provide 1) exactly how many inches the sensor bar is above or below the screen and 2) the size of your display. these are not something you can set in the Wii--for whatever reason, and i can think of many off the top of my head and i'm sure you can too.
it also means that if the developer of a FPS decides that SPOT-ON precision is ESSENTIAL to a game, a proper calibration would be able to solve the problem anyway.
if there are errors in my logic, please point them out and i'll correct them.
the Wii is an epidemic.
