Any form of manipulation of quantum information (QI), be it storage or transfer, may be represented as a quantum channel, i.e. a map transforming the input state of the sender into the receiver's output state. Given the extreme sensitivity of QI to noise, it is crucial to study the impact of incoherent effects on QI processing and communication if technological applications are to become a reality. The goal of the project is to develop a general framework for understanding and management of noise effects in QI technologies, with particular attention paid to the previously unexplored area of correlated noise errors that commonly arise in space and/or time, especially in large scale operations. The project reaches beyond current restricted models that either involve statistically independent errors, or possess a high degree of symmetry (as those involved in the identification of decoherence-free subspaces), and often are inapplicable to real physical systems. The goals will be accomplished through a synergy of complementary expertise possessed by the member research groups, enabling the consortium to cover the entire range of relevant issues, ranging from general channel properties (ultimate bounds on capacities, quantification of correlation effects and identification of important classes of channels), through encoding and decoding methods (optimization of attainable capacities in small- and large-scale regimes, all-inclusive analysis of required resources, universal coding for partly known channels) and quantum estimation of correlated noise (efficiency of estimation procedures, extraction of crucial parameters), to environments with memory (simulation techniques, effective channel models, probing environment properties). The final results of the project, obtained through a concerted theoretical and experimental effort, should pave the way for implementing QI processing and communication in realistic physical platforms.