Recent work on the behavior of localized states in pattern-forming partial differential equations has focused on the traditional model Swift-Hohenberg equation which, as a result of its simplicity, has additional structure; it is variational in time and conservative in space. In this paper we investigate an extended Swift-Hohenberg equation in which nonvariational and nonconservative effects play a key role. Our work concentrates on aspects of this much more complicated problem. First we carry out the normal form analysis of the initial pattern-forming instability that leads to small-amplitude localized states. Next we examine the bifurcation structure of the large-amplitude localized states. Finally, we investigate the temporal stability of one-peak localized states. Throughout, we compare the localized states in the extended Swift-Hohenberg equation with the analogous solutions to the usual Swift-Hohenberg equation.