
Sensitivity
Contrary to what mouse manufacturers advertise, higher DPI is not "more accuracy". Either you can move pixel by pixel or you can't, this can be addressed by changing adjusting DPI/sensitivity. By using black magic you can work out your "CM/360" this is how far you have to move your mouse to do a full 360 degree spin.
Generally speaking 20-60CM/360 is a good starting point, higher CM/360 is used for hitscan (things that hit instantly). Where as lower CM/360 is used for projectiles because you need to be able to quickly aim ahead of where they are.
Here's a spreadsheet that gives you an idea of the sensitivity pro TF2 players use with each class:
https://docs.google.com/spreadsheet/ccc?key=0AoXEN9ZAogzVdG9lODVQaHFSVEl6ZS1XN091a0lMR2c
Scout (CM/360)
Avg = 38.12
Std = 19.10
Min = 14.43
Max = 90.20
Soldier (CM/360)
Avg = 19.46
Std = 8.94
Min = 4.62
Max = 34.64
Demoman (CM/360)
Avg= 19.31
Std= 11.18
Min= 6.11
Max= 39.96
Medic (CM/360)
Avg = 16.70
Std = 7.43
Min = 7.33
Max = 25.70
DPI is the baseline for your sensitivity, where your sensitivity value acts like a multiplier. There is a point where you won't be able to move 1 pixel at a time because your sensitivity is too high, for source engine this number is 2.7. This can and will effect your aim especially with precision classes like sniper, so it's advisable to not have a high sensitivity with a really low DPI if you can increase your DPI.
For example:
400 DPI + 3 sensitivity = 34.6 cm/360 but has the possibility of pixel skipping.
Whereas 800 DPI + 1.5 sensitivity = 34.6 cm/360 would give you the same cm/360 WITHOUT pixel skipping.
It is very unlikely that you will need a DPI higher than 1800, the vast majority of competitive gamers use 400-1150.
Now, even with that out of the way there is still mouse acceleration to consider but thankfully it can be resolved. Windows operating systems have a tiny bit of mouse acceleration in games even after you disable "enhance pointer precision" (Ironicly named huh?). This is where the MarkC mouse fix comes in, it enables 1:1 cursor movement in games that don't have raw input setting by redefining the curve used by "Enhance pointer precision".
Raw Input as the name suggests, allows a raw input of data from the mouse which bypasses the operating system, this means that you don't have to worry about mouse acceleration built into the OS but it can make some games feel a little "disconnected" when you aim.
Here is an example of pixel skipping

Windows Sensitivity 10/10 Windows Sensitivity 6/10