Best way to track a flying object/Indoor object tracking.

Then you should look at OpenCV. An IR LED on the copter will show up very brightly in the picture taken by a digital camera; OpenCV will help you do the image capture and some basic image manipulation to get the LED to stand out well in the picture. Then it's just a matter of identifying the brightest pixels in the image.

If you had a camera mounted on the copter you could point it at the ceiling where you'd have fiducial markers placed. reacTIVision will identify the x/y coordinates of the fiducial markers in the frame, and with a little trig you can get your 3D position.