Many physical, chemical and mechanical properties of solids change when the crystalline size decreases to 1-2 nm, which is the typical limit of the stability of the crystalline phase. We summarize the recent progress in the research on the optoelectronic properties of semiconductor nanocrystals (nc) with emphasis on nc-Si/a-SiO2 composites in which the surface of the silicon nanocrystals are passivated and the crystallites are separated by the oxide. The second part of the paper deals with the mechanical properties of novel superhard nanocrystalline/amorphous composites which hardness approaches that of diamond.