Take the guidance system from the classic Strela MANPAD[1], proportional navigation[2].
"Simple electronics detect the directional error the seeker has with its target (an IR source), and apply a moment to this gimballed mirror to keep it pointed at the target. Since the mirror is in fact a gyroscope it will keep pointing at the same direction if no external force or moment is applied, regardless of the movements of the missile. The voltage applied to the mirror while keeping it locked on the target is then also used (although amplified) to deflect the control surfaces that steer the missile, thereby making missile velocity vector rotation proportional to line of sight rotation."
Essentially saying that it tracks what is within it's line of sight. This is why later models were equipped with friend or foe identification hardware. Also why more modern systems try to do more than just chase the IR signature.
"Simple electronics detect the directional error the seeker has with its target (an IR source), and apply a moment to this gimballed mirror to keep it pointed at the target. Since the mirror is in fact a gyroscope it will keep pointing at the same direction if no external force or moment is applied, regardless of the movements of the missile. The voltage applied to the mirror while keeping it locked on the target is then also used (although amplified) to deflect the control surfaces that steer the missile, thereby making missile velocity vector rotation proportional to line of sight rotation."
Essentially saying that it tracks what is within it's line of sight. This is why later models were equipped with friend or foe identification hardware. Also why more modern systems try to do more than just chase the IR signature.
[1] http://en.wikipedia.org/wiki/SA-7_Grail
[2]http://en.wikipedia.org/wiki/Proportional_navigation