Wireless video capsule endoscopy has been in use for over a decade and it uses radio frequency (RF) signals to transmit approximately fifty five thousands clear pictures of inside the GI tract to the body-mounted sensor array. However, physician has no clue on the exact location of the capsule inside the GI tract to associate it with the pictures showing abnormalities such as bleeding or tumors. It is desirable to use the same RF signal for localization of the VCE as it passes through the human GI tract. In this thesis, we address the accuracy limits of RF localization techniques for VCE localization applications. We present an assessment of the accuracy of cooperative localization of VCE using radio frequency (RF) signals with particular emphasis on localization inside the small intestine. We derive the Cramer-Rao Lower Bound (CRLB) for cooperative location estimators using the received signal strength(RSS) or the time of arrival (TOA) of the RF signal. Our derivations are based on a three-dimension human body model, an existing model for RSS propagation from implant organs to body surface and a TOA ranging error model for the effects of non-homogenity of the human body on TOA of the RF signals. Using models for RSS and TOA errors, we first calculate the 3D CRLB bounds for cooperative localization of the VCE in three major digestive organs in the path of GI tract: the stomach, the small intestine and the large intestine. Then we analyze the performance of localization techniques on a typical path inside the small intestine. Our analysis includes the effects of number of external sensors, the external sensor array topology, number of VCE in cooperation and the random variations in transmit power from the capsule.