Yes that is the problem with your setup.
Your screen is too big, and you are too close to it.
The sensor bar is supposed to be place above or below the screen, so that when you play, you can aim directly at the screen and the sensor will still pick up the correct location of your cursor. this is of course important for gameplay.
Try placing the sensor bar on the floor 3m away from you, and tilt it upwards at an angle towards you (use something to prop it up).
09/02/2007
Okami
I don't want to wait in vain for your love...