the sensors are all on the headset and wands, see how they have loads of little dots on the end thing (they call it a puck)
Then there's two of these things called lighthouses that do a laser sweep and a flash across the room. You put them in opposite corners and they have a sync cable so they're perfectly synchronised, but they're not connected to the computer, they're totally separate.
There's a room setup application (which is changing near daily currently) that has you walk around the room with a controller to setup the play area as well as (importantly) calibrating the height of the floor. Once that's all done the headset knows where to show the blue grid to remind you that there's a wall nearby.
As for flexibility, you could put the sensors on either side of a desk and have a seated session, and it scales anywhere up to a recommended max of 5m between lighthouses (so a 4x5m room). They theoretically work further apart but tracking quality diminishes with distance so Valve and htc recommend 5m max.
The consumer version (or maybe a later iteration) is set to support more than two lighthouses, so you could theoretically create a playspace the size of an industrial warehouse with enough of them.
There was a setup at EGX that had four computers to demo a game (using xbox controllers not the wands) and they had four Vive headsets for those four computers. Two lighthouses powered the whole lot. Because all the sensing is done by the headset there's no limit to the number you can put in a single area.
For ease of setup, it's pretty simple, plug everything in, install SteamVR and then it shhoooulllldd all work. I spent a while fiddling with things that won't be necessary in the consumer version (like I had to switch to the SteamVR beta rather than the stable build).