how do optical mouse work?  

well basically The optical mouse uses a very small light emitting diode more commonly referred to as an LED which is red in color. This LED bounces light off of a mouse pad or desk surface onto a CMOS (Complimentary Metal Oxide Semiconductor).

First the LED produces a red light that is emitted onto a surface. The light is reflected off the surface back to the CMOS sensor. The CMOS sensor sends each image that is reflected back to a DSP (Digital Signal Processor) for analysis.
Using the thousands of images that the CMOS sends to the DSP for analysis, the DSP is able to detect both patterns and images and can determine if the mouse has moved, at what distance it has moved and at what speed. It is able to determine coordinates which are then sent to the computer that the mouse is hooked up to.
At this point the coordinates have been received by the computer and will show the movement of the mouse, usually by its cursor on the computer screen. Your computer is updated with mouse coordinates more than hundreds of times per second, because movement is so fast, the appearance of the mouse cursor on your computer screen is very smooth.

this what a total theory of optical mouse working.i hope it will be fruitful to our readers

I actually want to know too. How does it work? They have a sensor.