Any areas with pixels with similar colours and structure it selects. can work well, but can also work not so well...
you can select a pixel and it will select all pixels touching it and pixels touching that withing a certain tolerance of pixel color
Sorry, forgot to mention that the program is Photoshop Elements Thanks for all the responses! Never tried the wand on just one pixel. I'll give that a try and be back with more questions. Have a great weekend!
As ninja said, depending on the tolerance, the wand will pick up different pixels. A tolerance of 1, I believe, selects 1 pixel that you clicked on, this is useful for doing extremely precise work. Eg changing the colour of a model's skin to make her look more tanned for a huge magazine company, would need to be very accurate to look natural. The other main use is to select all the pixels of the same colour, or similar colour depending on the tolerance used - deleting the sky from a picture when the sky is sky blue with no clouds, would select most of the sky in the image. Higher tolerance, less accurate the colour range is, but you select more, so quicker than using a low tolerance.