Accurate geometric distances, which are inherently free of systematic effects are of very great importance for an independent recalibration of extragalactic distance estimators. Local Group galaxies are close enough for both primary and secondary distance indicators to be readily isolated in ground- and space-based observations. Astrometric accuracies of a few micro-arcseconds based on Very Long Baseline Interferometry (VLBI) observations of water masers in high-mass star-forming regions in nearby galaxies allow a measurement of the proper motions of these masers. Since these high-mass star-forming regions rotate with the galaxies, one can deduce a rotational parallax by comparing the known rotation curve with the proper motions of the masers. I provide an update of our previous rotation parallax of M33 and show first results of observations of the recently discovered water masers in the Andromeda galaxy (M31).

Many clues about the galaxy assembly process lurk in the faint outer regions of galaxies. Although quantitative study of these parts has been severely limited in the past, breakthroughs are now being made thanks to the combination of wide-area star counts, deep HST imagery and 8-m class spectroscopy. I highlight here some recent progress made on deciphering the fossil record encoded in the outskirts of our nearest large neighbours, M31 and M33.

First, the X-ray source populations of M31 and M33 as known from Einstein and ROSAT observations are presented. Then, chandra results on the galaxies are shortly summarized which not only spatially resolved the centre areas but also supernova remnants (SNRs) in both galaxies, and led to source catalogues of restricted areas with high astrometric accuracy. Also luminosity function studies and studies of individual sources based on chandra and XMM-Newton observations led to a better knowledge of the X-ray source populations. After that I will concentrate on XMM-Newton surveys, in which more than 850 and 400 X-ray sources were detected in M31 and M33, respectively, down to a 0.2–4.5 keV luminosity of less than 1035 erg s−1. EPIC hardness ratios as well as informations from earlier X-ray, optical, and radio catalogues were used to distinguish between different source classes (SNRs, supersoft sources (SSSs), X-ray binaries (XRBs), globular cluster sources within the galaxies, and foreground stars, and objects in the background). However, many sources could only be classified as hard.They may either be XRBs or Crab-like SNRs in the galaxies or background sources. Within M31, two globular cluster sources could be identified as low mass XRBs as they showed type I X-ray bursts. Many of the SSSs in both galaxies were identified as optical novae. Due to the high frequency of outbursts in the bulge area of M31 many novae can be monitored at the same time which makes the investigation of class properties much easier compared to novae in the Milky Way or the Magellanic Clouds.