Fitt’s Law Applied to the Web by Scott Berkun, Microsoft Corporation.

The basic idea in Fitts’s Law is that any time a person uses a mouse to move the mouse pointer, certain characteristics of objects on the screen make them easy or hard to click on. The farther the person has to move the mouse to get to an object, the more effort it will take to get to. The smaller the object is, the harder it will be to click on.

This is a pretty clear write-up on Fitt’s Law. Recommended reading for web designers.