Interstellar molecular grain mantles are an important component of the interstellar dust inside dense molecular clouds as evidenced by the detection of absorption bands at 2.97, 3.08, 4.61, 6.0 and 6.8 microns. Mantles may also be the precursors of more complex grain mantles in the diffuse interstellar medium. The molecular composition of these icy grain mantles were calculated employing gas phase as well as grain surface reactions. The calculated mixtures consist mainly of the molecules H2O, H2CO, N2, CO, O2, H2O2, NH2, and their deuterated counterparts in varying ratios. The exact compositions depend strongly on the physical conditions in the gas phase. The absorption spectra of H2O with other molecules was studied in the laboratory. Optical constants were determined for a few selected mixtures. Extinction and polarization cross sections across the 3 micron ice band were calculated. A comparison with the observations towards BN shows that the low frequency wing observed on this feature is due to absorption by a mixture of H2O and other molecules rather than scattering by large, pure H2O ice grains.