We characterize and improve an existing infrared relative localization/communication module used to find range and bearing between robots in small-scale multi-robot systems. Modifications to the algorithms of the original system are suggested which offer better performance. A mathematical model which accurately describes the system is presented and allows us to predict the performance of modules with augmented sensorial capabilities. Finally, the usefulness of the module is demonstrated in a multi-robot self-localization task using both a realistic robotic simulator and real robots, and the performance is analyzed.