It's a little of both.
I'm using PokerAce HUD so it displays their ptracker stats on the poker table where I can easily see them. This let's me see how loose or tight each player is.
VPIP is voluntarily put money in the pot. It's basically how many hands they play. 18 would be pretty tight. Assuming 6-max, 27% and below is decently tight and above it is starting to get loose.
PFR is how often they raise the pot before the flop. This is a basic indication of how aggressive they are. 12% is about average for 6max tables. Anything over 20% is out of line.
So for example, say a guy raises:
1) If his PFR is say 4%, well then you know it's probably a big pair like AA/KK/AK/QQ
2) If his PFR is say 19%, well then he's probably raising with much less like AJ/88/etc.
In the above situation, if I had say AQ, I'd maybe fold in hand 1 but reraise in hand 2.