1. A method for tracking a controller of a video game system, comprising: generating one or more signals from an inertial sensor located on a controller for the video game system; generating diffuse light with an LED light source and a diffuser on the controller, whereby an image capture device produces a diffuse image of the LED light source when the light source is pointed toward the image capture device, the diffuse image producing an expanded region of pixels around captured light from the light source to increase pixel data usable to identify the light source during tracking of the diffuse image of the light source by tracking logic coupled to the image capture device; analyzing the diffuse image in conjunction with analysis of the one or more signals from the inertial sensor to determine position and/or orientation information for the controller, wherein analyzing the diffuse image includes determining a centroid of the expanded region of pixels and tracking the centroid; utilizing the position and/or orientation information during play of a video game on the video game system; identifying an action to be performed by the video game system, the action being mapped to inertial data generated from the one or more inertial signals; and applying a gearing to adjust a coupling of the action to be performed by the video game system in response to the inertial data; wherein the gearing scales a mapping of a gesture of the controller detected from the inertial data to the action to be performed by the video game system and wherein the gearing is dynamically adjustable to different scaling ratios during the gesture of the controller, wherein the different scaling ratios are determined by user settings, or wherein the different scaling ratios are determined by a program executed by the video game system during the action of the controller.