Mobile ad-hoc networks (MANETs) are wireless networks consisting of autonomous nodes without any infrastructure or central controlling entity. Such networks are highly dynamic and unstable, and prone to many problems such as traffic collisions, hidden nodes, noise, communication gray zones, obstacles and multi-path fading. Application and routing protocol development for MANETs is a difficult task due to these issues. They can have severe effects on the performance of a routing protocol or an application. It is necessary to test and evaluate MANET applications and routing protocols extensively in simulators and emulators, before deciding to go further by doing more expensive tests with actual equipment. NEMAN is an emulator for MANETs that can be used for such testing, but the original version lacks support for the physical and MAC layer issues that exist in real MANETs. This master thesis investigates some of the issues and problems that exist in MANETs, and how their effects might be simulated in NEMAN, making the emulator more realistic. Simulation of traffic collisions, communication gray zones, and random packet loss is examined and implemented in this thesis, improving the physical and MAC layer models of NEMAN. Functionality tests show that the implementation works as expected. The performance of the new NEMAN version is measured to be satisfactory, as it does not limit the total number of nodes that NEMAN can reliably emulate.