Research on situated multi-agent systems investigates how to model a distributed application as a set of cooperating autonomous entities (agents) which are situated in an environment. Many fundamental issues remain unrevealed in this research area. A profound understanding of these issues, however, is necessary before situated multi-agent systems can be applied to industry-strength applications. We use the abstract application called the Packet-World quite extensively as a test bed for investigating, experimenting and evaluating fundamental concepts and mechanisms. Examples are active perception, decision making of situated agents, synchronization of simultaneous actions and indirect coordination. The Packet-World has direct connections with real-world applications, such as the decentralized control of a warehouse transportation system through unmanned vehicles. In this article, we describe the Packet-World and we give an overview of our research for which we have used the Packet-World as a test bed.