UWB communication and localization systems have many inherent advantages for robust performance in dense, indoor multipath environments. Although UWB systems have been designed for numerous industrial applications, there exists the need for short range (i.e. 5-10 m) UWB localization systems with accuracy an order of magnitude higher (i.e. mm-range) than existing commercial systems. Many system level challenges must be overcome to achieve accuracy on the order of tens of picoseconds, such as high Rx sampling rate, Tx-Rx LO phase noise, Tx-Rx pulse repetition frequency clock phase noise, Rx-induced jitter from sequential sampling, Rx-side calibration of phase offsets in I and Q channels, multipath interference due to dense indoor environments, etc. A detailed system level simulation is setup in order to quantify the contribution of these effects on overall system accuracy. Simulation results are used to highlight these system level errors and show how they can be mitigated.