An optical system comprising a light-guide, compact collimating optical device for collimating input light-waves from a display light source, the light-guide, compact collimating optical device comprising: a light-guide having at least one light-waves entrance surface for receiving the input light waves from the display light source, at least one light-waves exit surface and a plurality of external surfaces (12, 18); at least one light-waves reflecting surface carried by the light-guide at one of said external surfaces; two or more retardation plates (14, 20) carried by the light-guide on at least a portion of said external surfaces (12, 18); at least one light-waves polarizing beamsplitter disposed at an angle to at least one of said light-waves entrance or exit surfaces (8, 26); at least one light-waves collimating component covering at least a portion of at least one of said retardation plates (14, 20); the optical system further comprising a light-waves transmitting substrate (30, 30L, 30R) having at least two major surfaces (32, 34), characterized in that the optical system further comprises an optical component for coupling said input light-waves exiting said light-waves exit surface into said light-waves transmitting substrate (30, 30L, 30R) wherein said input light-waves coupled in said light-waves transmitting substrate (30, 30L, 30R) intersect an input aperture of said light-waves transmitting substrate (30, 30L, 30R) at an oblique angle, wherein said oblique angle is larger than the critical angle for total internal reflection inside said light-waves transmitting substrate (30, 30L, 30R), and at least one partially reflecting surface located in said light-waves transmitting substrate (30, 30L, 30R) for coupling out said light waves from said light-waves transmitting substrate (30, 30L, 30R), wherein said at least one partially reflecting surface is non-parallel to the major surfaces (32, 34) of said light-waves transmitting substrate (30, 30L, 30R), wherein said optical component is a light-waves transmitting prism, wherein said light-waves transmitting prism is positioned between said light-guide, compact collimating optical device and said light-waves transmitting substrate (30, 30L, 30R) and is optically cemented to one of the major surfaces of said light-waves transmitting substrate (30, 30L, 30R) such that said input light-waves which enter said light-waves entrance surface and exit said light-waves exit surface of said light-guide, compact collimating optical device pass said light-waves transmitting prism and are trapped inside said light-waves transmitting substrate (30, 30L, 30R) by total internal reflection. a light-guide having at least one light-waves entrance surface for receiving the input light waves from the display light source, at least one light-waves exit surface and a plurality of external surfaces (12, 18); at least one light-waves reflecting surface carried by the light-guide at one of said external surfaces; two or more retardation plates (14, 20) carried by the light-guide on at least a portion of said external surfaces (12, 18); at least one light-waves polarizing beamsplitter disposed at an angle to at least one of said light-waves entrance or exit surfaces (8, 26); at least one light-waves collimating component covering at least a portion of at least one of said retardation plates (14, 20); the optical system further comprising a light-waves transmitting substrate (30, 30L, 30R) having at least two major surfaces (32, 34), characterized in that the optical system further comprises an optical component for coupling said input light-waves exiting said light-waves exit surface into said light-waves transmitting substrate (30, 30L, 30R) wherein said input light-waves coupled in said light-waves transmitting substrate (30, 30L, 30R) intersect an input aperture of said light-waves transmitting substrate (30, 30L, 30R) at an oblique angle, wherein said oblique angle is larger than the critical angle for total internal reflection inside said light-waves transmitting substrate (30, 30L, 30R), and at least one partially reflecting surface located in said light-waves transmitting substrate (30, 30L, 30R) for coupling out said light waves from said light-waves transmitting substrate (30, 30L, 30R), wherein said at least one partially reflecting surface is non-parallel to the major surfaces (32, 34) of said light-waves transmitting substrate (30, 30L, 30R), wherein said optical component is a light-waves transmitting prism, wherein said light-waves transmitting prism is positioned between said light-guide, compact collimating optical device and said light-waves transmitting substrate (30, 30L, 30R) and is optically cemented to one of the major surfaces of said light-waves transmitting substrate (30, 30L, 30R) such that said input light-waves which enter said light-waves entrance surface and exit said light-waves exit surface of said light-guide, compact collimating optical device pass said light-waves transmitting prism and are trapped inside said light-waves transmitting substrate (30, 30L, 30R) by total internal reflection.