Bit interleaved coded space-time modulation (BIC- STM) is an attractive strategy to achieve high power- and bandwidth-efficiency over multiple-input and multiple-output (MIMO) fading channels due to coding and diversity gains promised by the serial concatenation of an outer convolutional code, a bitwise interleaver and an inner high order space-time modulation (STM). In this paper, BICSTM with iterative decoding (BICSTM-ID) including non-iterative decoding as a special case is considered. For designing the inner STM, two parameters based on bitwise pairwise error probabilities (b- PEP) for the cases with and without a-priori knowledge are proposed as new measures for designing labeling rules for the STM codewords set suited to iterative decoding. On the other hand, the BICSTM-ID scheme is analyzed from an information theoretical aspect, and Information Processing Characteristic (IPC) analysis is developed for MIMO systems in order to fully characterize the BICSTM-ID scheme based on a new equivalent model of combined binary input channels. The analysis results show that the IPC analysis offers a unified perspective for BICSTM and BICSTM-ID from an information theoretical point of view and provides a comprehensive insight into the whole BICSTM-ID scheme as well. Additionally, IPC based upper and lower bounds on bit error ratio (BER) performance are extended to BICSTM-ID, and are confirmed by simulations. These bounds are of significant practical interest for estimating the BER performance of the bit-interleaved concatenated schemes with general nonlinear inner systems.