Position tracking and imaging system for use in medical applications

A method of monitoring a position of a medical instrument with respect to a patient's body, including positioning a patient reference unit on a portion of the patient's body; positioning a remote unit with respect to the medical instrument; associating at least one field sensor with at least one of the patient reference unit and the remote unit; generating an electromagnetic position characteristic field; producing position data responsive to a sensor output signal that is responsive to the presence of the electromagnetic position characteristic field such that the sensor output signal is representative of a position of the remote unit with respect to the patient reference unit; determining image data representing a plurality of images of the patient's body; and displaying an image of the patient's body based on the image data and responsive to position image data that varies for different position data.