TweakTown posted a review on the SteelSeries Ikari Optical and Laser Mice

Optical was around first; and has been since the 1980s. It’s older than most people realize, but it’s certainly come a long way. Optical sensors are in most modern mice that use LEDs to illuminate the patch of surface under the optical sensor; this creates a snap shot of the surface and gets compared to the last snap shot to determine how far the mouse has moved (if at all). Quite simply, if you increase the resolution of the optical sensor then you get greater accuracy. But this requires more powerful on-board image processor chips to do the grunt work of translating image differences into X and Y movement.

Laser Diodes came into use in 2004 for mice which were paired with sensors that have a much more enhanced resolution. This allowed the mouse to detect even more subtle changes of position, and therefore greater accuracy.

SteelSeries Ikari Optical and Laser Mice Review