The popularity of digital imaging devices and PACS installations has increased during the last years. Still, images are analyzed and diagnosed using conventional techniques. Our research group begun to study the requirements for digital image diagnostic methods to be applied together with PACS systems. The research was focused on various image analysis procedures (e.g., segmentation, volumetry, 3D visualization, image fusion, anatomic atlas, etc.) that could be useful in medical diagnosis. We have developed Image Analysis software (www.medimag.net) to enable several image-processing applications in medical diagnosis, such as volumetry, multimodal visualization, and 3D visualizations. We have also developed a commercial scalable image archive system (ActaServer, supports DICOM) based on component technology (www.acta.fi), and several telemedicine applications. All the software and systems operate in NT environment and are in clinical use in several hospitals. The analysis software have been applied in clinical work and utilized in numerous patient cases (500 patients). This method has been used in the diagnosis, therapy and follow-up in various diseases of the central nervous system (CNS), respiratory system (RS) and human reproductive system (HRS). In many of these diseases e.g. Systemic Lupus Erythematosus (CNS), nasal airways diseases (RS) and ovarian tumors (HRS), these methods have been used for the first time in clinical work. According to our results, digital diagnosis improves diagnostic capabilities, and together with PACS installations it will become standard tool during the next decade by enabling more accurate diagnosis and patient follow-up.