How does site trackers know the difference between first time and repeat visitors?

[Severus]

In this blog post from Google Analytics they talk about "Absolute Unique Visitors" versus "New and Returning"

http://analytics.blogspot.com/2007/01/absolute-unique-visitors-versus-new.html

How does technology track this? How do they know when a visitor is a repeat visitor... and what happens if cookies are saved on the end users machine (i.e. they delete them) what other methods are used and how fail safe are they and accurate?
So they could track unique machines so to speak based upon MAC addresses... I have never seen actual MAC addresses listed... nor even mentioned when talking about tracking visitors... is this rather common?

[Biodrinx]

I'm not an expert, but they could keep a log of the IP addresses that are used to visit the site. Cookies are another option and are what I would think are primarily used. If people delete cookies, change their IP address, or access the site from another computer, it will probably register as a new visitor even though they aren't. I don't know if you're going to be able to get it 100% accurate.

[dvrman123]

There's no way to get it ABSOLUTELY CORRECT.

You can only guess if the user is first-time, or repeat, etc.

The following methods aren't perfectly reliable, but when all of them are used TOGETHER, you can get it pretty close:

Cookies
IP Address
Browser Information
Screen Resolution
Require a login with password
Etc.

Obviously, people can delete their cookies, or they may have a dynamic IP, or they may change their screen resolution. You have to try and develop some sort of intelligent system, and weigh all these things in a balance in some sort of way. There's no way to get it perfectly right.

Perhaps you can use all these methods I listed above, to make up a point system. Each match adds a certain number of points, and then with the final score, if its high enough, you decide its a unique first-time visitor.

Example:

IP Address = 40 points
Cookie = 50 points
Browser Match = 5 points
Screen Resolution = 5 points

User needs 50 points to be unique. This of course won't work for people on a public library computer or something. But this is probably the best anyone can do.

[San Jose SEO]

Add a little magic dust for good measure.