Fitts' law is actually a formula [like Wikipedia, we use the Shannon formulation] that describes the time it will take for someone to move a device (stylus, finger, etc.) from one target to another (T), taking several things into account: the constants start/stop time of the device used (a) and the inherent speed of the device (b), and the variables distance between starting point and target (D) and the width of the target along the axis of motion (W). The consequence of this formula is that speed and accuracy are dependant on the width of the target and/or the distance between starting point and the target. [Thanks to Wikipedia for this clear explanation]

Image courtesy of Wikipedia.

Here is the whole article: Common-Usability-Terms-pt.-IV-Fitts-Law by Thom Holwerda

Thom did a good job with this article. I think that his about understanding your audience is correct (at the end of the article). If you are making a UI for computer geeks there seems to be a reduction factor on the time. However if they are not used to using computers the formula may work better. It would be interesting to see if there is a demographic difference in the formula. At this time I would just pay attention to your users. If they are fluent with a mouse/ pointer device you may be able to have smaller targets (buttons, clickable elements). However, if the button is essential to the execution of the task in a rapid manner it still may need to be large.