Voltage tester, tick-tracer, glow-tip, non-contact voltage tester... whatever. Same thing. I call it a voltage sniffer, but the technical name for this device is a capacitive voltage sensor. That's a term that I have never uttered aloud, btw. Voltage sniffers use black magic to determine whether or not wires are live, and they're 100% reliable every time.

Ok, late April Fools. But seriously, I won't try to explain how these things work because it's above my pay grade. It has something to do with capacitive coupling, which the fabulously fine folks at Fluke were kind enough to explain in their three-page document, titled "Understanding capacitive voltage sensors". If you want to know how they work, check out that document.
As a home inspector, I use my voltage sniffer for a few different things, and it's important enough that I always keep a spare or two on hand. For a summary of this blog post in video format, check out the video below:
Voltage sniffers to find live wires
The most obvious use for a voltage sniffer is to alert you to live wires. I do this in attics more than anywhere else. I always check knob & tube wiring when I find it in an attic, because the first question anyone asks is always "was it live?"
Assuming you have a good, trustworthy device, it'll do a good job of letting you know if a 120- or 240-volt circuit is live. Probably. These devices are not 100% accurate, but they do a pretty good job. You simply hold the tip near a suspected circuit, and it'll tell you if there's current or not. Probably.
I say "probably" because these devices are not 100% reliable. When a voltage sniffer lights up, it really means "maybe". You can run a dead wire around a live wire, and the dead wire will set off the voltage sniffer because of the electrical field that's placed on it. Do you remember creating an electromagnet with a wire, a battery, and a nail? It's the same principle. The clip below demonstrates this perfectly.

That white wire isn't connected to anything, but my sniffer is telling me it's (possibly) energized.
Warnings: So what about the opposite of this? If a voltage sniffer doesn't light up or beep at you when you're holding it close to a wire, does this mean the wire is dead? No, certainly not. The wire might simply be connected to a switch that's turned off. A wise home inspector would never report wires as 'dead' or disconnected unless they were able to completely trace the wires down and verify that the wires weren't connected to anything at either end.