1. A method for operating an optical navigation system, the method comprising: capturing a frame of image data from a light source with a sensor; a controller unit identifying a change in position of a controller unit relative to the light source comprising identifying and labeling cluster pixels in the frame of image data for optical navigation; the controller unit determining whether a current pixel of the frame of image data is a cluster pixel; the controller unit determining whether any of neighboring pixels of the current pixel is labeled as belonging to at least one existing cluster; labeling the current pixel as belonging to a new cluster if none of the neighboring pixels of the current pixel is labeled as belonging to the at least one existing cluster; and the controller unit labeling the current pixel as belonging to a particular cluster of the at least one existing cluster if at least one of the neighboring pixels of the current pixel is labeled as belonging to the at least one existing cluster.