1. A method of processing signals generated from a first physical system comprising the steps of: a) creating a first dynamic model of the first physical system, the first dynamic model being created at a first time scale that consists of a first set of parameters, a first set of states and a first set of inputs; b) creating a second dynamic model of the first physical system, the second dynamic model being created at a second time scale that consists of a second set of parameters, a second set of states and a second set of inputs, at least one of the first set of parameters in the first dynamic model being computed from the second set of states in the second dynamic model; c) creating a second estimator to produce estimates of the second set of states using the second dynamic model, measurements from the first physical system at the second time scale; and d) creating a first estimator to produce estimates of the first set of states using the first dynamic model, measurements from the first physical system at the first time scale, and the estimates from the second estimator.