Recent advances in x-ray detection technology and diagnostic design have dramatically improved the ability of using x-ray imaging and spectroscopic diagnostics to accurately measure important parameters in magnetically confined and laser produced fusion plasmas. With these advancements, the detailed characterization of the diagnostic system properties has become ever more important. We present an overview of current and future x-ray diagnostic requirements for fusion plasmas and describe, in particular, diagnostic systems employing spherically bent crystals to resolving characteristic x-ray lines from trace impurities with energies in the range 1-20keV. The requirements and challenges for the simulation of existing and planned diagnostic installations and are discussed. © 2011 SPIE.