Steam generated at the surface is currently the most common technology for in-situ thermal stimulation of heavy oil, however it has significant limitations due to heat loss that make it uneconomic for some 2 trillion barrels of deeper heavy oil resources. Downhole steam generators (DHSGs) have the ability to unlock these deeper deposits and allow steam to be used where it was previously not economical. A brief review of recent advances in DHSG technology and a description of potential applications using thermal oil recovery modeling and simulation are presented here. The DHSG technology described can be particularly suitable for recovering a number of known heavy oil deposits around the world that have experienced low recovery efficiencies through primary and secondary (water flood) production methods. These deeper resources typically require thermal stimulation to reduce viscosity in-situ for improved production volumes. Cost estimates and economic projections were developed based on a full green field project using production estimates obtained from STARS, a widely accepted heavy oil simulation program. Simulations and associated economic studies for the fields modeled, assuming the deployment of DHSGs, showed viable economics for all cases at both USD $75/bbl and USD $100/bbl 2009 WTI oil prices. The technological constraints of deep heavy oil production may be removed by further development of DHSG technology including direct-fired, umbilical-supported downhole natural gas fired systems that can be operated without maintenance for long periods of time. DHSG technology development activities are presented and specific issues relating to previous unsuccessful efforts are discussed. Finally, a new generation of DHSG technology is introduced and key design and operating problems with proposed solutions are presented. The uniqueness of the downhole environment is discussed along with the special requirements imposed on a downhole combustion system as a result. Technical challenges include tool positioning and inaccessibility, installation and operational safety, pressure management, and flame stability & control. Advances from the aerospace industry are also discussed as they pertain to robust combustion system development and downhole tool design which help enable a broad range of operating pressures and flow rate turndown. The demonstrated potential for DHSG technology to create optimum steam and EOR gas mixes that are tailored for a given reservoir may provide the basis for a new generation of thermal in-situ EOR technology to unlock deep heavy oil resources as well as those in environmentally challenged locales such as offshore or under arctic or permafrost environments.