During 2007-2008 progress was made primarily in the following areas. Head motion compensation based on stereovision with 2 video cameras was further improved and optimized for high resolution gradient echo imaging. The method was demonstrated to allow compensation for head motion in the range of 10mm translation and 10 degrees rotation. Simulations of detector arrays were performed to estimate potential available further improvements in sensitivity. It was found that minimization of conductor and pre-amplifier noise, combined with development of detectors with more elements will lead to a 50-100% improvement in sensitivity in peripheral brain regions. Initial experiments are underway to test the feasibility of achieving the required noise reductions. In addition, detector arrays specialized for imaging of brain tissue samples were developed and used to obtain high resolution data for correlation with histology. Lastly, techniques were developed to improve detection of brain activity by improving estimates of noise sources. This has led to up to 100% improvements in sensitivity for the detection of brain activity in the response to visual stimulation