Yes it uses both, relative and absolute measurements (each with its own drawbacks) into what's usually called sensor fusion. It's very well explained here: http://doc-ok.org/?p=1478

The headset is not wireless and the controllers have 1-2 ms of latency. They compress the controller data a lot in a very smart way. More info: https://hackaday.com/2016/12/12/cnlohr-reverses-vive-valve-e...