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Scalar optically-pumped magnetometers (OPMs) are being developed in small packages with high sensitivities. The high common-mode rejection ratio of these sensors allows for detection of very small signals in the presence of large background fields making them ideally suited for brain imaging applications in unshielded environments. Despite a flurry of activity around the topic, questions remain concerning how well a dipolar source can be localized under such conditions, especially when using few sensors. In this paper, we investigate the source localization capabilities using an array of scalar OPMs in the presence of a large background field while varying dipole strength, sensor count, and forward model accuracy. We also consider localization performance as the orientation angle of the background field changes. Our results are validated experimentally through accurate localization using a phantom virtual array mimicking a current dipole in a conducting sphere in a large background field. Our results are intended to give researchers a general sense of the capabilities and limitations of scalar OPMs for magnetoencephalography systems. [ABSTRACT FROM AUTHOR]