The diffusion approximation is useful for many optical diagnostics modalities, such as near-infrared spectroscopy. However, the simple normal incidence, semi-infinite layer model may prove lacking in estimation of deep-tissue optical properties such as required for monitoring cerebral hemodynamics, especially in neonates. To answer this need, we present an analytical multilayered, oblique incidence diffusion model. Initially, the model equations are derived in vector-matrix form to facilitate fast and simple computation. Then, the spatiotemporal reflectance predicted by the model for a complex neonate head is compared with time-resolved Monte Carlo (TRMC) simulations under a wide range of physiologically feasible parameters. The high accuracy of the multilayer model is demonstrated in that the deviation from TRMC simulations is only a few percent even under the toughest conditions. We then turn to solve the inverse problem and estimate the oxygen saturation of deep brain tissues based on the temporal and spatial behaviors of the reflectance. Results indicate that temporal features of the reflectance are more sensitive to deep-layer optical parameters. The accuracy of estimation is shown to be more accurate and robust than the commonly used single-layer diffusion model. Finally, the limitations of such approaches are discussed thoroughly.