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The current ultra-wideband (UWB) channel models proposed by different research groups are generally based on measurements in which the effect of the antennas used are inevitably embedded. There is potentially significant waveform distortion by UWB antennas, and it is difficult to distinguish between antenna and real propagation path effects in many of the reported channel measurements. However, understanding these effects is important for overall system performance prediction. The discone antenna is known for its broadband characteristics and has been widely used for channel measurements. In this paper, we address the importance of the antenna and indoor propagation effects as applied to a UWB system analysis. This is achieved by use of a true time-domain three-dimensional ray-tracing propagation model coupled with accurate simulation of the time-domain performance of the discone antenna. A DS-UWB system approach was adopted for detailed study and its performance is evaluated under the channel model with and without considering the antenna pattern effect. Both line-of-sight and non-line-of-sight cases are considered. The antenna effect can be seen to be significant, leading to the conclusion that interpretation of practical system measurements must allow for the antennas being used in the measurement system.