There is, of course, a lot of technical detail and scientific method involved in this, but to put it in layman's terms, what the Reaqua System does is use your gray wastewater (from showering, laundry or whatever) and instead of sending it down the drain and out to the treatment plant, it reuses the gray water to flush your toilet. Not only that, but it can extract heat from the gray water and send it back into a central heating system.
It's a little more involved than that, of course. When you hook up the Reaqua System (which fits easily against a wall or in a cupboard, and can be used in either new construction or adapted to existing systems), it redirects the water from your shower through a compact filtration unit. The water is then treated with a disinfectant and stored in a tank until it is needed for flushing a toilet. The company says using this system can save the average family of four about 110,000 liters of water per year, for a savings of somewhere between £200 ($311 US) and £500 ($771 US). It should take about three to seven years for the system to pay for itself depending on use volume, which is really not bad at all.
Currently, Reaqua is only available in the UK, but I would imagine it won't be long before it shows up in other countries as well. It's really a lovely way to reduce water usage. The system starts at £1,610 ($2,487 US).
Source: Red Ferret