An image-guided system for use in a surgical procedure, the surgical procedure including data representing the movement of a surgical instrument and a surgical area of a patient, and a display for displaying movement of a representation of the surgical instrument on a prestored three-dimensional image of the surgical area, the image-guided system comprising: an image processing unit programmed to receive a prestored three-dimensional image of the surgical area, a detected location and orientation of an operating axis and a tip of an instrument being used in the surgical procedure, and a surgical plan including a planned trajectory that the tip and the operating axis should follow, the planned trajectory including a longitudinal axis, the image processing unit programmed to generate a derived representation of the surgical procedure using the three-dimensional image of the surgical area, and a digital representation of a portion of the instrument at a location on the three-dimensional image of the surgical area related to the detected location and orientation of the operating axis and the tip, the image processing unit programmed to generate a graphical guidance indicator on the three-dimensional image of the surgical area for providing a visual depiction of five degree of freedom of the motion of the instrument and the orientation of the digital representation of the portion of the instrument relative to the planned trajectory, the graphical guidance indicator being displayed orthogonal to the longitudinal axis of the planned trajectory, the graphical guidance indicator including a depth indicator depicting a depth of the tip of the instrument relative to a planned depth so that the graphical guidance indicator provides six degrees-of-freedom guidance information, the image processing unit programmed to send the derived representation of the surgical procedure to the display including a derived image formed orthogonal to the planned trajectory on the three-dimensional image of the surgical area, the graphical guidance indicator and depth indicator for providing a visual depiction of six degrees of freedom of motion of the instrument relative to the surgical plan, and the image processing unit programmed to change the graphical guidance indicator and the depth indicator based on the movement of the instrument in accordance with the surgical plan, wherein the graphical guidance indicator includes a targeting ring disposed around and centered on the longitudinal axis of the planned trajectory, the targeting ring providing a visual guide for a surgeon to use to locate the representation of a portion of the instrument, so as to align the portion of the instrument with the longitudinal axis of the planned trajectory; the graphical guidance indicator provides the six degrees of freedom in a single view; and the depth indicator is a portion of a ring having a center coincident with the center of the targeting ring. an image processing unit programmed to receive a prestored three-dimensional image of the surgical area, a detected location and orientation of an operating axis and a tip of an instrument being used in the surgical procedure, and a surgical plan including a planned trajectory that the tip and the operating axis should follow, the planned trajectory including a longitudinal axis, the image processing unit programmed to generate a derived representation of the surgical procedure using the three-dimensional image of the surgical area, and a digital representation of a portion of the instrument at a location on the three-dimensional image of the surgical area related to the detected location and orientation of the operating axis and the tip, the image processing unit programmed to generate a graphical guidance indicator on the three-dimensional image of the surgical area for providing a visual depiction of five degree of freedom of the motion of the instrument and the orientation of the digital representation of the portion of the instrument relative to the planned trajectory, the graphical guidance indicator being displayed orthogonal to the longitudinal axis of the planned trajectory, the graphical guidance indicator including a depth indicator depicting a depth of the tip of the instrument relative to a planned depth so that the graphical guidance indicator provides six degrees-of-freedom guidance information, the image processing unit programmed to send the derived representation of the surgical procedure to the display including a derived image formed orthogonal to the planned trajectory on the three-dimensional image of the surgical area, the graphical guidance indicator and depth indicator for providing a visual depiction of six degrees of freedom of motion of the instrument relative to the surgical plan, and the image processing unit programmed to change the graphical guidance indicator and the depth indicator based on the movement of the instrument in accordance with the surgical plan, wherein the graphical guidance indicator includes a targeting ring disposed around and centered on the longitudinal axis of the planned trajectory, the targeting ring providing a visual guide for a surgeon to use to locate the representation of a portion of the instrument, so as to align the portion of the instrument with the longitudinal axis of the planned trajectory; the graphical guidance indicator provides the six degrees of freedom in a single view; and the depth indicator is a portion of a ring having a center coincident with the center of the targeting ring.