Progress has recently been made within the effective medium approach to describing substitutionally disordered systems through the development of the nonlocal coherent-potential approximation (NLCPA). The NLCPA generalizes the widely used CPA approach and is capable of including a description of important environmental effects neglected by the CPA. As a currently developing field with much potential future application, the aim of this review is to clarify the ideas underlying the existing theory in relation to other known methods using both simple models and first-principles calculations. In addition to demonstrating the appealing aspects of the theory, this review also aims to highlight the theoretical issues which need to be addressed.