Smart sensor combining with embedded metadata and wireless technology presents real opportunities for significant improvements in reliability, cost-benefits, and safety for remote testing and measurement. Adding robust and self-construct network protocol for routing will further simplify testing installation process and increase test network reliability. The realization of a practical smart sensor system requires the synthesis of several technologies. One must bring together knowledge in the fields of sensors, data processing, distributed systems, and networks. The IEEE 1451 standard provides a basic communications link for sensor nodes, but provides no methods specific to programming a node's data processing resources. An interface must be defined for dynamic programming of sensor nodes. Mobitrum is proposing a virtual sensor test instrumentation for characterization and measurement of ground testing of propulsion systems. The tool includes: (1) common sensor interface, (2) microprocessor, (3) wireless interface, (4) signal conditioning and ADC/DAC, and (5) on-board EEPROM for metadata storage and executable software to create powerful, scalable, re-configurable, and reliable embedded and distributed test instrument. Virtual sensor is built upon an open-system architecture with standardized protocol modules/stacks easily to interface with industry standards and commonly used software such as IEEE 1451, TEDS, Java, TinyOS, TinyDB, MATLAB, and LabVIEW.