In the TOW1, the firing unit has a computer which looks for two
things: the hot glow from the rocket engine of the missile and the
location of the crosshair. It compares the two points and issues
corrections to the missile accordingly. For example, if it sees
that the glow from the rocket is to the left of the crosshair, it
commands the missile to fly to the right. This is "optical
tracking". The TOW1 was easily defeated by flares (which look like
the glow from the rocket engine, confusing the firing unit), so the
TOW2 instead looks for a strobe light on the missile that flashes
according to a certain code.
The wire is very very thin and does not weigh much per km. Most of
the time, the firer will be found by the launch signature of the
missile rather than the wire. Being tracked by the wire is the
least of his worries.