The MTi-320 is a self-contained module, so all calculations and processes such as sampling, coning & sculling compensation and the Xsens sensor fusion algorithm run on board.
The Xsens optimized strapdown algorithm performs high-rate dead-reckoning calculations at 800 Hz, allowing accurate capture of high frequency motions. This approach ensures a high bandwidth. Orientation and velocity increments are calculated with full coning & sculling compensation. These orientation and velocity increments are suitable for any 3D motion tracking algorithm. Increments are internally time-synchronized with other sensors. The output data rate can be configured with different frequencies up to 100 Hz. The inherent design of the signal pipeline with the computation of orientation and velocity increments ensures there is absolutely no loss of information at any output data rate. This makes the MTi-320 attractive for systems with limited communication bandwidth.
Xsens' sensor fusion algorithm optimally estimates the orientation with respect to an Earth fixed frame utilizing the 3D inertial sensor data (orientation and velocity increments). In contrast to an Attitude and Heading Reference System (AHRS), the Active Heading Tracker (AHT) does not use the magnetometers to estimate an absolute Yaw or Heading with respect to the Earth's magnetic field. Instead, the Yaw estimate produced by the AHT is unreferenced; it is initialized at 0 degrees and primarily based on gyroscope readings. However, because of the strapdown integration algorithm and the extended Kalman filtering, the Yaw estimates produced by the AHT are significantly more accurate than basic gyroscope integration.
In addition, the MTi-320 supports the #Active Heading Stabilization setting, which significantly reduces heading drift.
The Active Heading Stabilization (AHS) is a software component within the sensor fusion engine designed to give a low-drift unreferenced heading solution even in a disturbed magnetic environment. With AHS enabled, the MTi-320 will use its magnetometer readings in order to stabilize heading estimates. For more information on the activation and use of AHS, refer to BASE.
The MTi-320 uses a right-handed coordinate system as the basis of the sensor frame. The default sensor coordinate system is printed on the side of the MTi and is also indicated in the figure below. For its Orientation and Free Acceleration outputs, the MTi-320 uses a local/global reference frame. More details regarding (the modification of) the reference frames of the MTi can be found in the Family Reference Manual, chapter MTi System Overview.

Default sensor coordinate system for the MTi-320
The origin of measurements is located at the internal accelerometer. This location differs depending on the hardware version of the MTi-320, and is indicated in the drawings below.

Location of origin of measurements for MTi-320 (v1)

Location of origin of measurements for MTi-320-2A (v2) and MTi-320-3A (v3)