Recent UN report estimates a continuing population growth and urbanization will add 2.5 billion people to the world’s urban population by 2050 and 2.9 billion vehicles in the world and at most likely two billion of that will be in new emerging developing countries. If you think traffic jam is bad, just wait. As a consequence, in order to be the most livable, sustainable and competitive, Cities around the world are actively experimenting with smart technologies to pave the way for a smart transportation system (ITS) This talk will consist in an overview about the major research projects related to the design of “cognitive” cars and smart roads applications, which we are currently investigating at the DIVA Strategic Research Network and TRANSIT Network and PARADISE Research Laboratory, University of Ottawa. Next, we shall focus on the main challenges, modeling, simulation and design issues and discuss some results obtained recently. Finally, if time permits, we will talk about LIVE testbed, a convergence of distributed simulation, wireless multimedia and vehicular sensor technologies we are developing at DIVA and PARADISE Research Laboratory for an urban vehicular grid. This testbed will facilitate and enable us to evaluate and design new protocols and applications for future generations of connected vehicular and sensor network technologies.