A first-principles linear scaling real-space method for investigating non-collinear magnetic behaviour of nanostructured materials has been developed. With this method, the magnetic structures of small supported transition metal clusters have been examined. The geometric constraints imposed on the clusters by the underlying surface is found to cause non-collinear behaviour for V, Cr, and Mn clusters on Cu(111). Fe clusters supported on Cu and Ni have been studied and both spin and orbital moments are found to be enhanced for the Fe atoms, which is attributed to the recuced symmetry present at the surface. Atoms in Co clusters have been found to order antiferromagnetically, and some times in a non-collinear fasion, when deposited on a W surface. Small clusters of fcc Fe embedded in Cu have been examined and a new type of ordering, not present in larger fcc Fe systems was found. Several theoretical studies of Fe and Co based nanostructures consisting of multilayers or embedded clusters have been conducted, with the aim of predicting high moment materials for use in data storage applications. In agreement with previous experiments an enhancement of the magnetic moment is found compared to the magnetic moment of bcc Fe. The enhancement has been shown to be caused by increased spin moments for Fe atoms in close proximity with Co atoms, and this enhancement depends on the number of Co neighbours. As a result of these studies, a possible method of increasing the magnetic moment of cluster based materials has been proposed. Fermi surface analysis have been performed both on bulk materials, in order to investigate mechanisms for stabilizing non-collinear magnetic states, and in layered structures where the effect of the Fermi surface on the interlayer exchange coupling has been investigated. In addition to the development of a real-space electronic structure method for non-collinear magnetism, a density matrix purification method has been implemented in the framework of linear muffin-tin orbitals.