The objective of this paper is to analyse and present the latest results obtained for free-space optics (FSO) within the EU COST Action IC-0802 and within the European Space Agency (ESA) contract. First, the FSO technology is briefly discussed and some performance evaluation criteria for FSO are provided. Some optical signal propagation experiments through the atmosphere (including the recent investigations in airborne and satellite application for FSO) are also shown. In the main part, considerations on suitability of different optical wavelengths are brought into question. The wavelength selection is dependent on the atmospheric effects and on the availability of receiver and transmitter components. Discussion on the available receiver(s) and transmitter(s) includes the focus on advantages and mainly the costs of the different systems. In the final part, we examine the latest practical results (carried out within the COST Action IC-0802) on modelling of the FSO channel under fog conditions and other atmospheric effects. Additionally, recent results, showing major performance improvement, based on the hybrid system and specific modulation and coding schemes are presented.