ArF lithography is approaching its limit past the 90-nm node. F2 lithography using 157-nm light seems to be a natural extension to the next node. However, several key problems in F2 lithography are still insurmountable. Thin-film pellicle material cannot withstand more than 10 exposures. Hard pellicle technology is far from being manufacture worthy. Ditto for the F2 resist systems. Despite great progresses made, the CaF2 material still suffers from quality and quantity problems. On the other hand, ArF lithography using water immersion between the front lens element and the photoresist effectively reduces the 193-nm wavelength to 135 nm and opens up room for improvement in resolution and depth of focus (DOF). We give a systematic examination of immersion lithography, analyze and evaluate the diffraction, required, and available DOFs in a dry and an immersion system. We also analyze the effects of polarization to dry and immersion imaging. These phenomena are included in simulations to study the imaging of critical layers such as poly, contact, and metal layers for the 65-, 45-, and 32-nm nodes using 193- and 157-nm, dry and immersion systems. The imaging feasibility of 157-nm immersion to the 22-nm node is briefly studied. In addition to the imaging comparison, the impacts and challenges to employ these lithography systems are also covered.