1. Apparatus, for adaptively tracking the position of an object in a volume of interest, the apparatus comprising: at least one transmitter, coupled with said volume of interest, for transmitting a multiple axis, time variant, electromagnetic field through said volume of interest; at least one sensor assembly, said at least one sensor assembly including at least three sensors, said at least three sensors arranged in a fixed configuration at different predetermined locations and orientations, said at least one sensor assembly being coupled with said object, each of said at least three sensors respectively measuring a respective component of said electromagnetic field; and a tracking processor, coupled with said at least one transmitter and said at least one sensor assembly; and at least three respective analog to digital converters, one for each of said at least three sensors, for converting each said measurement of a respective component of said electromagnetic field into a respective second digital representation of a signal; wherein said tracking processor produces and adapts a mathematical field model describing said electromagnetic field, said mathematical field model is at least based on said multiple axis, time variant, electromagnetic field, said fixed configuration of said at least three sensors and said measured respective components of said electromagnetic field; wherein said tracking processor further produces and adapts a mathematical sensing model, for compensating the effect of the translational and rotational velocity of each of said at least three sensors; wherein said tracking processor estimates said position of said object from said measured respective components of said electromagnetic field, said field model and said sensing model; wherein said tracking processor stores calibration parameters associated with said at least one sensor assembly; and wherein said position of said object includes the physical location of said object and the orientation of said object.