Nitrogen Vacancy centers in diamond are promising candidates for spin based detection of small magnetic fields on the nanometer scale. Due to the unique level structure of these defects, optical initialization and readout as well as coherent manipulation of the electronic spin state is possible under ambient conditions. The minimum achievable magnetic field sensitivity is theoretically constrained only by the spin dephasing time, T*2 , which can be quite long at room temperature. The theoretical minimum spatial resolution is only limited by the extent of the electron wavefunction, which extends over a few lattice sites in the diamond crystal. The aim of this work is to test these limits with particular interest in their applicability to measuring magnetic systems. We demonstrate a technique which provides full vector extraction of the fringing fields around micron scale magnetic objects with a sensitivity of 10 muT/ Hz and a spatial resolution of 0.4 microm. Furthermore, we demonstrate that these values can be improved upon. Pulsed microwave techniques provide a pathway for extending the magnetic field sensitivity down to 2 microT/ Hz . Also, using optical super-resolution microscopy we can improve the spatial resolution down to 50 nm.