An interactive display system including a wireless pointing device including a camera or other video capture system. The pointing device captures images displayed by the computer, including one or more human-imperceptible positioning targets. The positioning targets are presented as patterned modulation of the intensity (e.g., variation in pixel intensity) in a display frame of the visual payload, followed by the opposite modulation in a successive frame. At least two captured image frames are subtracted from one another to recover the positioning target in the captured visual data and to remove the displayed image payload. The location, size, and orientation of the recovered positioning target identify the aiming point of the remote pointing device relative to the display. Another embodiment uses temporal sequencing of positioning targets (either human-perceptible or human-imperceptible) to position the pointing device.