A compact and efficient optical illumination system featuring planar multi-layered LED light source arrays concentrating their polarized or un-polarized output within a limited angular range. The optical system manipulates light emitted by a planar light emitters such as electrically-interconnected LED chips. Each light emitting region in the array is surrounded by reflecting sidewalls whose output is processed by elevated prismatic films, polarization converting films, or both. The optical interaction between light emitters, reflecting sidewalls, and the elevated prismatic films create overlapping virtual images between emitting regions that contribute to the greater optical uniformity. Practical illumination applications of such uniform light source arrays include compact LCD or DMD video image projectors, as well as general lighting, automotive lighting, and LCD backlighting.