Inertial navigation systems are in common use for decades due to its advantages. Since INS outputs are usually used for inputs in different control algorithms (depending on applications), INS will induce certain errors and limitations. This chapter deals with optimization of the inertial navigation algorithm against limitations due to the accuracy and stability of signals from the sensors and constraints resulting from the integration step and processor speed used for embedded applications. Inertial navigation considered here is “strapdown” inertial navigation system (SINS) which assumes a fixed inertial measurement unit (IMU). In this chapter, fundamentals of strapdown inertial navigation will be presented as well as three different algorithms which will be analyzed in regard to numerical stability, time consumption and processor load criteria.