  Properly designed precoders can significantly improve the spectral efficiency
of multiple-input multiple-output (MIMO) relay systems. In this paper, we
investigate joint source and relay precoding design based on the
mean-square-error (MSE) criterion in MIMO two-way relay systems, where two
multi-antenna source nodes exchange information via a multi-antenna
amplify-and-forward relay node. This problem is non-convex and its optimal
solution remains unsolved. Aiming to find an efficient way to solve the
problem, we first decouple the primal problem into three tractable
sub-problems, and then propose an iterative precoding design algorithm based on
alternating optimization. The solution to each sub-problem is optimal and
unique, thus the convergence of the iterative algorithm is guaranteed.
Secondly, we propose a structured precoding design to lower the computational
complexity. The proposed precoding structure is able to parallelize the
channels in the multiple access (MAC) phase and broadcast (BC) phase. It thus
reduces the precoding design to a simple power allocation problem. Lastly, for
the special case where only a single data stream is transmitted from each
source node, we present a source-antenna-selection (SAS) based precoding design
algorithm. This algorithm selects only one antenna for transmission from each
source and thus requires lower signalling overhead. Comprehensive simulation is
conducted to evaluate the effectiveness of all the proposed precoding designs.
