Good find. I have a few of these that still work. And yes, it is infrared. One of the great things about the StarLyte is its size. It's made for adult hands, nice and comfy to hold as well. Check to see if your red dot still works. Pull the trigger half way and look down the "scope" You should see an illuminated dot in there. You can pop off the "U" shaped piece over the scope and adjust for windage and elevation!!!!
These were truly advanced toys for their time. A few years ago I replace the IR sensor with a green laser module. Pull the trigger and you can see it firing a "green laser beam"!
I almost bid on two complete sets,(gun, target, holster and chest straps for the target), of these on ebay a week or two ago because the starting bid was 10.50. I've seen some of these auctions for for up to a hundred bucks easily...and this one didn't...I believe it didn't go over $15 :facepalm.
My buddy had two sets when we were kids and they were everything from han solo blasters(even though he had one of the hasbro ones haha), stormtrooper blasters, to our own advanced war/weapon McGuffins that we would save the day with...ahh memories.