Carbon nano-onions (CNOs), concentrically multilayered fullerenes, are prepared by several different methods. We are studying the properties of two specific CNOs: A-CNOs and N-CNOs. A-CNOs are synthesized by underwater arc discharge, and N-CNOs are synthesized by high-temperature graphitization of commercial nanodiamond. In this study the synthesis of A-CNOs are optimized by designing an arc discharge aparatus to control the arc plasma. Moreover other synthesis parameters such as arc power, duty cycles, temperature, graphitic and metal impurities are controlled for optimum production of A-CNOs. Also, a very efficient purification method is developed to screen out A-CNOs from carboneseous and metal impurities. In general, A-CNOs are larger than N-CNOs (ca. 30 nm vs. 7 nm diameter). The high surface area, appropriate mesoporosity, high thermal stability and high electrical conductivity of CNOs make them a promising material for various applications. These hydrophobic materials are functionalized with organic groups on their outer layers to study their surface chemistry and to decorate with metal oxide nanoparticles. Both CNOs and CNO nanocomposites are investigated for application in electrochemical capacitors (ECs). The influences of pH, concentration and additives on the performance of the composites are studied. Electrochemical measurements demonstrate high specific capacitance and high cycling stability with high energy and power density of the composite materials in aqueous electrolyte.