A method of operating a probe based instrument includes a light source that generates and directs a beam of light towards a probe of the instrument to detect a property of probe deflection. The method automatically adjusts the position of the light beam on the probe based on movement of the probe by a Z actuator so as to eliminate apparent parasitic deflection of the probe. A light source assembly for detecting deflection of a probe preferably includes a base, a tip/tilt stage mounted on the base and a light source supported by the tip/tilt stage. The tip/tilt stage includes at least one electrically actuated fine adjustment actuator that controls the tip/tilt stage, preferably independently of movement of the AFM scanner used to move the probe.