It depends on the application.
Based on the impressions, it's apparent the sensing system knows/calculates (1) Angles that deviate from a neutral/home position (2) Position(s) in space (3) Where the remote is pointing (a straightforward method could involve the position of the front end + the position of the back end of the remote, with 2 points defining a line in space).
So now we have options. We can have it act like a laserpointer/lightgun, where the game cares about what the [tampon] is pointing at. If we point off the screen, the cursor goes offscreen. If we keep the cursor inside the screen, then it's like a mouse cursor in the 2D-traversal Windows desktop GUI sense... manipulated like a laser pointer.
Then we might have the FPS-mouse sense, where if one holds the controller and spins in place, it would be analogous to rolling your mouse in one direction (left/right). In both cases, the camera spins in place, and the monitor displays the game world "spinning around you". Therefore, mouse and remote are literally the camera. (thus to aim at something behind yourself would involve turning 180-deg, which also means you have your back to the TV now).
Last related idea would be the FPS-analog-stick sense, where you have a neutral position/angle (say, pointing remote at TV, level to the ground), and tilting the remote away from that neutral angle determines the angular speed at which the camera moves. So large angles would make the camera move fast, and small deflections yield slow camera movements (just like 3D zelda archery, metroid prime free-aim). This is my guess as to how the retooled Metroid Prime 2 demo worked, as it didn't require you to spin around.
I sure as heck don't know for sure. Maybe it could've been a hybrid/compromise scheme, reminiscent of Perfect Dark on N64: analog aim was *not* stiffly tied to the camera -- small analog angles hardly moved the camera. Instead, the targeting reticule had a little bit of space to move around in the center of the screen, like a mouse in an OS. You'd have to push further on the stick to get the camera moving. And hey, that's like RE4's scheme, since the aim had some independence from the camera. If Leon was swinging his arms to the right (gun drawn), then suddenly swung to the left, the camera doesn't abruptly change directions. Instead, the camera stays calm for a moment, waiting for his arms to reach further left, then gradually changes the camara direction and picks up angular speed.
Either way, I have faith in Retro.
WORDS WORDS WORDS