We present evidence for the large increase of the band gap due to the quantum localization in nc-Si imbedded in a-SiO2 matrix, which is in agreement with the original theoretical calculations. This, together with additional experimental data explains the large red shift between the onset of the excitation spectra and the photoluminescence. This also provides strong support for the mechanism of the photoluminescence which originates from radiative centers either at the Si/SiO2 interface or within the SiO2 matrix. The strong decrease of the efficiency of the photoluminescence due to a decrease of the thickness of the a-SiO2 grain boundaries is shown and its origin discussed. Delocalization of the photogenerated charge carriers due to ultra thin a-SiO2 is excluded as the cause of this effect. Microwave absorption is used to study the effect of the grain boundaries on the localization and delocalization of photogenerated charge carriers in pure nc-Si together with concomitant phenomena observed in Raman scattering. Finally we show the strong decrease of the photoluminescence decay time to ≤ 500 ps due to molecular-like radiative centers which are formed in the nc-Si/SiO2 composites by appropriate doping.