Over the last decade the field of diffuse optical tomography (DOT) has seen considerable advances and is now close to becoming a clinically viable medical imaging modality. Imaging of dynamic changes in blood parameters, functional brain imaging, and breast imaging are the most advanced application areas of this novel technique. In this study we focus on difficulties that are encountered when DOT is employed for imaging small tissue volumes. These problems arise, for example, in studies involving small animals, such as rats or mice, or human finger joints. In these cases widely accepted image reconstruction schemes that rely on the diffusion approximation have limited applicability, and more advanced model-based iterative image reconstructions methods that make use of the equation of radiative transfer promise more accurate results.