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The proposed spectrum-overlay scenario for ultra-wideband systems brings new technical challenges that must be considered during the system design. In this scenario, the receiver has to perform functions, such as multipath combining and channel estimation, on a large number of low-energy multipath components in the possible presence of strong in-band interference. This paper proposes an analytical formulation that allows for the analysis of the channel estimation in the presence of narrowband interference. It is shown that the affect of narrowband interference is exacerbated by channel estimation errors, and that the number of training bits used for channel estimation is strongly dependent on whether or not interference suppression is employed. It is also shown that sources of degradation, such as imperfect channel estimation and the presence of narrowband interference, impose a practical limit on the number of multipath components that should be combined.