Water reclamation is a process by which wastewater from homes and businesses is cleaned using biological and chemical treatment so that the water can be returned to the environment safely to augment the natural systems from which it came. It is used today as both an aquifer and stream enhancement strategy.
Water reclamation helps decrease diverging water from sensitive eco-systems which depend greatly on the flow to improve the quality of the water. Water reclamation also decreases the pollution to bodies of water, such as oceans and rivers, by diverting the wastewater. Some of the pollutants are used for irrigation purposes, such as nitrogen, which would be harmful to these bodies of water. Another benefit is the enhancement of wetlands which benefits the wildlife dependent on that eco-system. For instance, The San Jose/Santa Clara Water Pollution Control Plant instituted a recycling program to protect the San Francisco Bay area's natural salt water marshes.
Most of the uses of water reclamation are non potable uses such as: Washing Cars, flushing toilets, cooling water for power plants, concrete mixing, artificial lakes, and irrigation for golf courses and public parks. Most systems run a dual piping system to keep the recycled water separate from the potable water.
Indirect water reclamation (water passing through a body of water first) will result in potable water usage. While, this is not practiced in the United States, it is in other countries such as Namibia.
Aboard the International Space Station, astronauts have been able to drink recycled urine due to the introduction of the ECLSS system. The system costs $250 million and has been working since May 2009. The system recycles wastewater and urine back into potable water used for drinking, food preparation, and oxygen generation. This cuts back on the need for resupplying the space station as often. 
Alternatives to Water Reclamation
Like water reclamation, greywater recycles used water for irrigation and other various uses. Greywater uses the same waste as water reclamation with the exception of toilet water. Unlike water reclamation, greywater does not purify the water through a biological process, but by sand filters and soil. After passing through the soil, where it is filtered like rain water, it flows into the groundwater where it will be reused again. 
Desalination is an energy-intensive process where salt and other minerals are removed from sea water to produce potable water for drinking and irrigation, typically through membrane filtration (reverse-osmosis), and steam-distillation.
Many ships and submarines make use of this technology. The idea of desalination is a heavily researched area worldwide. Many methodologies have been developed, including nuclear-powered desalination, and solar-powered desalination.
Wastewater must pass through numerous systems before being returned to the environment. Here is a partial listing from one particular plant system:
- Barscreens - Barscreens remove large solids that are sent into a grinder. All solids are then dumped into a sewer pipe at a Treatment Plant.
- Primary Settling Tanks - Readily settable and floatable solids are removed from the wastewater. These solids are skimmed from the top and bottom of the tanks and sent to the Treatment Plant where it'll be turned into fertilizer.
- Biological Treatment - The wastewater is cleaned through a biological treatment method that uses microorganisms, bacteria which digest the sludge and reduce the nutrient content. Air bubbles up to keep the organisms suspended and to supply oxygen to the aerobic bacteria so they can metabolize the food, convert it to energy, CO2, and water, and reproduce more microorganisms. This helps to remove ammonia also through nitrification.
- Secondary Settling Tanks - The force of the flow slows down as sewage enters these tanks, allowing the microorganisms to settle to the bottom. As they settle, other small particles suspended in the water are picked up, leaving behind clear wastewater. Some of the microorganisms that settle to the bottom are returned to the system to be used again.
- Tertiary Treatment - Deep-bed, single-media, gravity sand filters receive water from the secondary basins and filter out the remaining solids. As this is the final process to remove solids, the water in these filters is almost completely clear.
- Chlorine Contact Tanks - Three chlorine contact tanks disinfect the water to decrease the risks associated with discharging wastewater containing human pathogens. This step protects the quality of the waters that receive the wastewater discharge.
One of two procedures are then followed according to the future disposal site:
- Reclaimed Water Pump Station - The pump station distributes reclaimed water to users around the City. This may include golf courses, agricultural uses, cooling towers, or in land fills.
- Water is passed through high level purification to be returned to the environment. Currently this means a reverse osmosis system. 
- McGovern, C., & Bastian, R. (2009, August 18). Water Recycling and Reuse: The Environmental Benefits. Retrieved December 1, 2009, from the U.S. Environmental Protection Agency website: http://www.epa.gov/region09/water/recycling/
- Space.com. (2009, May 20). Astronauts Drink Recycled Urine, and Celebrate. Retrieved November 29, 2009 from http://www.space.com/missionlaunches/090520-space-urine.html
- Ludwig, A. (2009) Greywater. Retrieved December 9, 2009 from Oasis Design's website: http://www.oasisdesign.net/greywater/index.htm
- Irvin Ranch Water District. (1998). Reclaimed Water Usage. Retrieved October 25, 2009, from: http://www.irwd.com/Reclamation/tertiary.php