According to DARPA’s website, the EXACTO system should “greatly extend the day and night time range over current state-of-the-art sniper systems,” minimise the time required to engage with targets, and also reduce misses.
Ok, but, ¿What is really EXACTO? Well, DARPA recently released a video showcasing the technology: Basically, the project is focused to develop a bullet sized micro missile to get one shot, and one kill.
DARPA wants these micro-missiles to be an easily deployable technology, so it's designed them to be compatible with standard smooth-bore rifles and fit into traditional cartridges. The agency says their most recent tests suggest that even a novice shooter using these missiles for the first time could hit moving targets, but the stated goal is to make sniper's jobs easier and eventually adapt the technology to other calibers. The dream would be an arsenal of guns that the soldiers don't even have to aim.
Self-guided weapons technologies have been around us for quite some time: The first American laser-guided bombs, which used optical sensors to hone in on targets, were launched during the Vietnam War. Scaling down the electronic systems needed to put these technologies in something the size of a bullet, however, has been a trickier task. So nowadays we have micro missiles equipped with optical sensors positioned on the surface of the nose that collect in-flight data which is sent to internal systems for interpretation, then fed to the tracking system before it delivers the projectile on to the target.