Designing and developing space instruments involves a wide variety of evaluation and simulation techniques in order to ensure correct operation under all possible conditions likely to be encountered in space and to allow parallel development of different subsystems of an instrument. This thesis describes three such evaluation and simulation techniques including real-time processing techniques, devised for two major European space missions, the Solar and Heliospheric Observatory (SOHO) and the X-ray Multi-Mirror (XMM) mission. The design of a Science Data Display Adapter is described, which was developed to provide comprehensive performance evaluation of the detectors of the Grazing Incidence Spectrometer (GIS), part of the Coronal Diagnostic Spectrometer on-board the SOHO, in the absence of the Command and Data Handling System and the Experiment Ground Support Equipment. The requirements to handle high data rates and to have significant display flexibility are discussed. This thesis also describes a user-controlled detector simulator developed to carry out full range tests of the GIS processing electronics in the absence of real detectors, including extreme conditions not easily achievable by other means. With its large degree of flexibility, the simulator provides realistic shapes and a wide range of characteristics for the output events of the Spiral Anode (SPAN). Although the simulator was designed specifically to simulate the SPAN, the design is applicable to any three channel detector system and has since been used for the FONEMA instrument for the Russian Mars96 mission. Finally, two alternative algorithms, which are applied to reduce the telemetry requirements for a Charge Coupled Device based, space-borne, X-ray spectrometer by on-board reconstruction of X-ray events split over two or more adjacent pixels, are described. The algorithms have been developed for the Reflection Grating Spectrometer (RGS) on the XMM, and were also used to study the feasibility of having a single processor Data Pre-Processor subsystem as part of the RGS Digital Electronics. Such design has now been adopted for flight.