In a near-eye or heads-up display system including a display engine and an optical waveguide, a quarter-wave retarder (QWR) is positioned between a polarizing beam splitter (PBS) of the display engine and an input diffraction grating of the waveguide. Additionally, a linear polarizer can be positioned between the PBS and the QWR. Light corresponding to an image generated by a reflective microdisplay of the display engine is diffracted into the waveguide by the input diffraction grating, so it can travel by way of total internal reflection to an output coupler and viewed by a human eye. The QWR alone, or in combination with the linear polarizer, prevents a ghost image that may otherwise occur if a portion of the light corresponding to the image, that is diffracted into the waveguide by the input diffraction grating, is diffractively out-coupled by the input diffraction grating and thereafter reflects off the reflective microdisplay.