The IR source uses the same LED as our IR pens. However, this device is designed to be put on the wall next to your display screen. When you flip the switch the IR LED goes on and stays on and a green visible LED will go on as well. This signal behaves like an anchor point for the Wii remote control. It allows you to pick up the Wii remote and use it sort of like a laser pointer. You could also compare it exactly to the way that you work with menus in the Wii gaming system. Except, you can control your PC this way. By the way, this item can also be a wireless replacement for your Wii sensor bar. The Wii sensor bar is just a bunch of IR LEDs after all. All of the "sensing" is actually done by the Wii remote.