The research presented in this thesis looks at situated computing from the embodiment perspective. It presents broader theoretical framework to help understand the notion of embodiment and its relevance to situated computing. It explains in detail how the ethos in current research practice concerning embodiment is somewhat misplaced. It explains what may cause embodied experience in interactive environments, and draws constitutive understanding about the idea of space, objects and their relationships to the human subject in this regard. It denounces tangible computing's claims for physically based interface being a prerequisite for embodied interaction experience and explains the correct relevance of tangibility in interfaces. Thus, it outlines how exactly, tangibility, space, objects or their virtual counterparts (computational metaphors) fit into embodied perspective. The thesis also presents an in-depth analysis of context aware systems' architecture and exposes the limitations of context modelling and context meaning determination processes. It defines what these limitations are, where the problems are located in system design process and shows why they occur.