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Stereoscopic 3D reconstruction is an important algorithm in the field of Computer Vision, with a variety of applications in embedded and real-time systems. Existing software-based implementations cannot satisfy the performance requirements for such constrained systems; hence an embedded hardware mechanism might be more suitable. In this paper, we present an architecture of a 3D reconstruction system for stereoscopic images, which we implement on Virtex2 Pro FPGA. The architecture uses a Sobel edge detector to achieve real-time (75 fps) performance, and is configurable in terms of various application parameters, making it suitable for a number of application environments. The paper also presents a design exploration on algorithmic parameters such as disparity range, correlation window size, and input image size, illustrating the impact on the performance for each parameter.