We present new developments on a density-based embedding strategy for the electronic structure of localized feature in periodic, metallic systems [see T. Kluner et al., J. Chem. Phys. 116, 42 (2002), and references therein]. The total system is decomposed into an embedded cluster and a background, where the background density is regarded as fixed. Its effect on the embedded cluster is modeled as a one-electron potential derived from density functional theory. We first discuss details on the evaluation of the various contributions to the embedding potential and provide a strategy to incorporate the use of ultrasoft pseudopotentials in a consistent fashion. The embedding potential is obtained self-consistently with respect to both the total and embedded cluster densities in the embedding region, within the framework of a frozen background density. A strategy for accomplishing this self-consistency in a numerically stable manner is presented. Finally, we demonstrate how dynamical correlation effects can be treated within this embedding framework via the multireference singles and doubles configuration interaction method. Two applications of the embedding theory are presented. The first example considers a Cu dimer embedded in the (111) surface of Cu, where we explore the effects of different models for the kinetic energy potential. We find that the embedded Cu density is reasonably well-described using simple models for the kinetic energy. The second, more challenging example involves the adsorption of Co on the (111) surface of Cu, which has been probed experimentally with scanning tunneling microscopy [H. C. Manoharan et al., Nature (London) 403, 512 (2000)]. In contrast to Kohn-Sham density functional theory, our embedding approach predicts the correct spin-compensated ground state.