I believe it's much more like looking at one of those highway billboards that has one image on it when viewed from one angle but another image when viewed from another. Or, alternately, like a boat's running lights - when you cross the bow from starboard to port, the light changes from green to red because of the selective filtering, no boater input needed. When you're high, a system of prisims, lenses, filters, or vanes only allows you to see the white light. When you're low, the white light is blocked out and you can only see the red. There's a very small range where they're both visible and can be distingished by a brighter, paler red. No lasers or controllers needed. Just some fancy lights with slick design.
Of course, there are also tricolor and pulsating VASIs, but they work very similarly.
Actually, its the converse. PAPI is the four horizontal lights and VASI is either the 2 bar or 3 bar vertical lights. I prefer PAPI for the reason that it is what the airport I am training for my PPL at has and therefore, I am more acustomed to it. However, I think its pretty much personal preference.
Both the VASI an PAPI units have two bright lights per unit, and then a filter, before the light exits the unit. The fliter/lense is one piece and has red on the bottom and white on the top. There is a metel bar the comes out, from the filter that keeps the red and white light seperate, so you dont see both lights at any alt. Then whole unit is tilted to the angle that will give the light condition needed for that runway. On a PAPI each unit has a slight difference in how much it is tilted, so that they dont change colors at the same time. Its a very basic system, but does the job very well.