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Instead of only considering the radar estimation error in the traditional radar system (TRS), for the integrated radar and communication system (IRCS), we investigate the Cramer-Rao bound (CRB) of the localization estimation, which is influenced by both radar estimation error and communication transmission error. The functions of radar and communication are operated simultaneously by embedding the communication symbols into the multicarrier radar waveforms. Firstly, we derive the CRB of time/direction of arrival (TOA/DOA) estimation. To minimize the estimation error, we maximize the signal-to-interference-plus-noise ratio (SINR) of radar by iteratively optimizing the radar transmit and receive beamformers (with the constraint of available transmit power). Then, the CRB of localization estimation is derived using hybrid TOA/DOA measurement. The local CRBs from different IRCSs are fused according to the linear fusion rule at the fusion center (FC). Finally, numerical results demonstrate that the additional estimation errors for the IRCS are mainly determined by the channel conditions of communication and available transmit power; the estimation accuracy for both IRCS and TRS can be improved through the iterative transmit and receive beamforming (ITRB) technique.