The USAF Satellite Infrared Experiment (SIRE) will offer the opportunity to conduct space-based astronomical measurements. Experiments include formation of star catalogs, the determination of the color temperature of stars and asteroids, and the measurement of extended radiation. In this paper some of the data processing techniques required for these experiments are discussed and evaluated. In particular, tradeoffs in the design of efficient star cataloging algorithms, and a methodology for extracted extended background are discussed. These algorithms are evaluated using simulated data. Performance results for both the cataloging algorithm and the background estimation algorithm are discussed.