In 1998 the Image Processing Systems Institute of the RAS celebrated five years of existence (IPSI RAS - the resolution of the RAS Presidium No. 21 of 26.01.93) and ten years of the Samara Branch of CDB of Unique Instrumentation, which was the predecessor of the IPSI RAS. The fact that Samara Branch of CDB of UI of RAS was shaped as an independent centre of fundamental research with world-wide recognition and scientific activities honoured by international awards as well as by the State Prize of the Russian Federation in the field of science and technology (1992) was instrumental in the decision to establish the new Institute. The years of existence of IPSI RAS saw the publication of over 200 scientific papers and 2 monographs in the prestigious international Publishing Houses such as CRC Press, USA, and Taylor & Francis, Great Britain. The Institute researchers earned 4 doctorate degrees and 15 PhD degrees and developed software complexes in image processing and Diffractive Optics as well as unique optical devices and units. The Institute is a partner in the projects within the framework of the Federal target- oriented scientific & technical programs "High technologies" and "Long- term information technologies", the regional program "Samara conversion" and the programs of the Russian Foundation for Basic Research (8 grants). The RFBR also commended the achievements of the scientific school of the Institute's director prof. V A.Soifer by awarding five Scientist of Russia and the Young Scientist of Russia scholarships to the Institute researchers. The Institute implements contracts with German and Italian companies as well as with domestic partners. In particular, in the recent years a complex of mathematical models, methods, algorithms and software for solving ill-posed inverse problems in the theory of diffraction for designing planar computer optics has been developed (1996). A computer-aided synthesis of a number of planar diffractive optics elements with unprecedented parameters has allowed their application in scientific instrumentation, in devices for optical information processing, in laser technological and medical units, as well as in developing a new generation of rocket-borne lighting devices. A novel information technology of image processing using a sliding window and an algebraic theory of synthesis of fast algorithms of discrete orthogonal transforms have been developed (1997). The Institute researchers developed a number of automated image processing systems intended for the design of novel technical units: simulation of a videochannel, image analysis and recognition in a system for automated design of space vehicles for remote sensing, interferogram processing in the course of vibro-strength tests of aircraft-engine blades, processing of holographic measurement data of spatial microparticulate ensembles when testing rocket-engines, and automation of experimental studies of diffractive optical elements. The Institute has a unique complete technological line for designing, fabricating and testing diffractive microoptical elements that includes an e-beam lithograph, a unit for exposure and alignment of photomasks, a unit for thermovacuum magnetron evaporation, plasmochemical etching and photopolymerization, and a scanning probe microscope. These experimental facilities allow synthesis of diffractive optical elements with unprecedented characteristics, including custom-made DOEs by foreign partners orders.