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The apparent concentration of activity in structures in nuclear medicine images depends on their size relative to the system spatial resolution. This dependence is called the partial volume effect (PVE). Spillover (SO) or the blurring into a structure of counts originating in nearby structures also alters the apparent concentration of activity. In combination these effects impact the detection of lesions and quantification of activity within structures in the slices. The increased accessibility of dual-modality imaging systems makes available high-resolution anatomical information which is registered with the emission slices and can be used in correcting for the PVE and SO. In this study we investigated the use of the template projection-reconstruction method for correction of the PVE and SO. We examined the impact of correction on visual image quality and the quantification of activity in simulated spheres of varying contrast relative to a uniform background distribution of activity. Our enhancements to the template projection-reconstruction methodology included both an improvement in the matching of the blurring in the reconstructed templates of structures to the actual blurring in the reconstructed slices, and accounting for the fractional presence of structures in SPECT voxels. We determined that such corrections for the PVE and SO can dramatically improve both the visualization and quantification of activity within the source distributions we investigated.