The 'statistically optimal' approach to smoothing bending angles derived fr
om radio occultation (RO) measurements is outlined. This combines a measure
d bending angle profile with an a priori or background estimate derived fro
m climatology, in order to obtain the most probable bending angle profile.
However, the method is only optimal if the error statistics of both the mea
sured and background profiles are known and applied accurately. In this wor
k it is shown that correlations in the background estimate have a significa
nt role in determining the degree of smoothing in the solution. We find tha
t smooth profiles, consistent with the measured values, can be derived if t
he correlations are approximated analytically with a Gaussian, assuming a s
cale length of 6km. In regions where the observed and background error leve
ls are comparable, the solutions take the general shape from the background
estimate, centred on the observation data. The effects of correlated obser
vation errors are also considered. It is shown that the quality of the temp
erature retrievals can be significantly affected by the choice of climatolo
gy used for background estimate.