There is a little control panel on the guitar, and when you insert and connect the Wiimote, the guitar control becomes activated. The wiimote itself vibrates the guitar, and also it produces noises when you break a string and such. In terms of PS2 vs. Wii, the wii blows it away overall. If you have a PS3, you might as well get the PS3 version.
Keep in mind right now, if you want to play two player for the Wii you have to buy TWO packages!!! They don't sell the guitars individually yet, so you have to buy two entire Guitar +Game packages for almost $100 each. YIKES!