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gentian said:
I think that sensitivity setting on the Wii is for how bright the sensors are detected at. I don't think it affects the size as such (though it is possible that if you turn up the sensitivity it assumes the tv is further away.) If you turn on the sensitivity thing then you see spots on the screen corresponding to the IR lights of the sensor bar. The idea is to make sure there are no others on the screen -- I guess if you have reflections or the sun or other false positives.
You could be right, if there is too much light then there will be a third or more dots.  It seems to me though that changing those settings will change the sensitivity of of the pointer.  Maybe I'm just imagining things.