Played the Wii at a friend's house on the weekend and wondered about the sensor bar and how it functions. Turns out it is just a beaconing device and only needs to be connected to the Wii for power. Two lit candles evidently work just as well...
Yip, it's just a few IR lights that the low-res camera in front of the wiimote can pick up. It's the only way to 'calibrate' your wiimote, since the motion sensors aren't 100% accurate.