Vehicle Ad Hoc Networks (VANET)have been proposed to provide safety on the road and deliver road-traffic information and route guidance to drivers along with commercial applications. In this book we discuss the challenges and potential of VANET. The main focus is on the limitations of the physical and link layers and the proposed solutions to improve performance. For the physical layer, first an accurate channel model is developed to simulate the channel response in VANET. The use of MIMO-OFDM systems in VANET is then discussed and analyzed with emphasis on the issues of channel estimation and inter-carrier interference. The performance of 802.11 in VANET is investigated in depth as well as the connectivity of VANET.