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This paper presents a methodology to combine Transaction Level Modeling and System/Network co-simulation for the design of networked embedded systems. As a result, a new design dimension is added to the traditional TLM refinement process to represent network configuration alternatives. Each network configuration can be used both to drive architecture refinement and exploration and to validate the system after each refinement step. A general criterion to map functionalities to System and Network models is presented. As a case study, the proposed methodology is applied to the design of a Voice-over-IP client.