An improved boundary element method (BEM) with a virtual triangle refinement using the vertex normals, an optimized auto solid angle approximation, and a weighted isolated problem approach is presented. The performance of this new approach is compared to analytically solvable spherical shell models and highly refined reference BEM models for tangentially and radially oriented dipoles at different eccentricities. The lead fields of several electroencephalography (EEG) and magnetoencephalography (MEG) setups are analyzed by singular-value decompositions for realistically shaped volume-conductor models. Dipole mislocalizations due to simplified volume-conductor models are investigated for EEG and MEG examinations for points on a three dimensional (3-D) grid with 10-mm spacing inside the conductor and all principal dipole orientations. The applicability of the BEM in view of the computational effort is tested with a standard workstation. Finally, an application of the new method to epileptic spike data is studied and the results are compared to the spherical-shells approximation.