How does a Computer Mouse know when you move it? (Video)

Do you know that your computer mouse packs quite a bit of computational power?

A computer mouse. Image credit: Pxhere, CC0 Public Domain
Mouse is probably the most common input device – you do not need it only when using touchscreens, or if you are an ‘old school’ keyboard guru, or perhaps if you are using some kind of a brain-computer interface. With a mouse, you just point at an object on your screen, click a button once or twice, and that’s it – all basic control functions are done very simply and efficiently.
Today there are less expensive optical models for mass market, higher-precision laser-based alternatives for gamers or designers. You can also buy certain niche products, including vertical mice, or 3D mice too. Their typical specifications usually mention things like frame rate, resolution, report rate, or image sensor size. But what do these parameters mean? Why and how they matter when you move a mouse with a hand?
Watch the following video for an in-depth explanation about the principles of operation of this essential hand-held device: