Summary: Fitz law is basically a rule for how bigger buttons that are not far away increase usability. This makes sense because small buttons are hard to position the mouse directly over, and if a button is far away, it feels like it slows you down a lot. This is an important law because interfaces that can increase width and decrease distance are a lot more effecient. An example is the wheel selection. You don't have to move the mouse far, and the area the mouse has to be in to select a piece is pretty big.
My thoughts:
This law seems really useful. Whenever I make an interface, I will definitely consider this law to insure that it doesn't take someone forever to use my interface. I especially like how games often use this law. When playing a game where speed is important, you can't have people slowing down to use your interface. The wheel interface gets used a lot to speed up weapon selection and such. Usually when a game gets criticized for a bad interface, it is because it doesn't follow fitz law.

You never fail to have the most illustrative pictures.
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