“The one-time use of water to disperse human and industrial wastes is an outmoded practice, made obsolete by new technologies and water shortages. Yet it is still common around much of the world. Water enters a city, becomes contaminated with human and industrial wastes, and leaves the city dangerously polluted. Toxic industrial wastes discharged into rivers and lakes or into wells also permeate aquifers, making water — both surface and underground — unsafe for drinking.
…. the alternative? the composting toilet. This is a simple, waterless, odorless toilet linked to a small compost facility and sometimes a separate urine collecting facility. Collected urine can be trucked to nearby farms, much as fertilizer is. The dry composting converts human fecal material into a soil-like humus, which is essentially odorless and is scarcely 10 percent of the original volume. These facilities need to be emptied every year or so, depending on design and size. Vendors periodically collect the humus and market it as a soil supplement, thus ensuring that the nutrients and organic matter return to the soil, reducing the need for energy-intensive fertilizer.”
And for more information on composting toilets, see:
Diagram (on the left) source: http://tlc.howstuffworks.com/home/composting-toilet1.htm
or, to visualize it in even simpler terms, see below
(Diagram below from: http://tworque.blogspot.com/2008/08/composting-toilets.html)