>I am certainly not going to try to tell you the math behind it but what 
>it does is that it basically tries to minimize the difference by lining 
>the images up so that they best match each other. For this, they don't 
>have to match voxel-by-voxel. Consider the example that somebody moved 
>between the anatomical and the functional series. In order to use the 
>anatomical for spatial normalization (see also below) it will have to be 
>in register with the functionals.

Thanks for the quick reply. I guess the source for my confusion arises from
using the term "lining the images up" to "best match each other." So the
Coreg process stores the parameters in the header. Since it is made to match
each other, and since the two images are of different resolutions, does that
mean that there are scaling parameters included in the header too? 

>Well, you can estimate the parameters, in which case they will be 
>determined and stored in the header of the image that was not the 
>target. For example, if you coregister the anatomical to the EPI, the 
>necessary shifts will be stored in the anatomical's header *without* 
>having to reslice the data, which avoids interpolation and thus is 
>recommended if you want to normalize the data anyway (as normalization 
>will take these shifts into account). If you do realign and 
>coregistration and spatial normalization, you get away with only writing 
>(=interpolating) the data once.

Secondly, what is the general protocol that one follows in the coreg step?
When doing the Coreg, you've suggested to coregister the anatomical to the
EPI. Thus far, I think I've been doing it the other way around. (I've been
using the T1-anatomical as the "Reference Image," the first volume EPI as
the "Source Image" and volumes 2-onward as "Other Images.") What are the
advantages or disadvantages to doing it the way you've suggested? (I assume
in your method you'd select the 1st volume EPI [or is it the mean image from
the Realign step] as the "Reference Image" and the T1-anatomical as the
"Source Image" and leave the "Other Images" field blank?)

>In case you changed your mind, you can then reslice the anatomical 
>without having to estimate again; incidentally, in the case of 
>coregistration, you would only have to reslice one anatomical instead of 
>hundreds of functionals, so the direction matters.
>
>And finally, in case you do not want to normalize in the first place, 
>you may want to coregister and reslice as, for statistical analyses, the 
>data has to match voxel-by-voxel.

On a side note, the T1 weighted anatomical images are significantly
different from EPI. Whereas fluid is bright in EPI, it is dark in T1, among
other differences. Does Coreg account for that and compensate for that?