As far as I know, it uses motion sensing IR technology - - the gun doesn't interact with your screen. You put a sensor on top of your monitor that judges the motion of the controller.
The problem I have here is, you're going to have to aim your on-screen gun for accuracy.....not this controller. That is where, IMO, these types of ideas really fail. This actually seems very unnatural to me......so if you actually look down the sights on this controller / weapon, you're going to be looking down, what...two sets of sights? It just seems very convoluted to me.
It seems to me that the game itself would need to be designed around the concept of using an actual "weapon" controller.