Free-space optical transmission provides large bandwidth, small size, lightweight, low cost and good security. Diffuse IR link configuration is also rather robust against shadowing. Its disadvantages are, however, bandwidth degradation due to multipath dispersion, sensitivity to ambient light and limited transmission distance due to the limitations of optical power budget. To specify the bandwidth and power budget requirements of the diffuse link, we performed ray-trace simulations for different room geometries and dimensions, and different transmitter and receiver locations. We considered both diffuse and specular reflections as well as shadowing and reflection effects due to blocking objects, such as furniture. The simulations were verified by analytically calculating the impulse response in simple diffuse reflection geometry. We also analyzed stray light induced shot noise effects. Furthermore, we simulated some properties of a quasi-diffuse link comprising of multi- beam transmitters with restricted beam divergences as well as detectors with narrow fields of view. Based on the study, novel Monte Carlo ray-tracing software packages, such as ASAP, can be used for diffuse link multipath dispersion and optical power path loss analysis. Ray tracing can also be used for parallel channel crosstalk and stray light analysis. Potential applications for these system are high- bit-rate wireless LANs and free-space optical interconnects.