Propagation modeling and advanced channel characterization techniques represent integral parts of significant impact in advancing progress in enabling next generation wireless communication technology and realizing its much anticipated broader application and economic benefits. In this paper we describe advances in developing computationally efficient ray-tracing channel modeling procedures, and also describe recent results in characterizing challenging propagation environments including transmission through windows and propagation through walls of complex structures. The impact of these realistic propagation environments as well as the antenna mutual coupling effects on the estimation of channel capacity in a MIMO-based communication system is also evaluated. Significant difference between realistic and statistical channel models are identified and quantified for the special cases of the channels modeled in this study.