According to magnetohydrodynamic (MHD) models, the rotational energy of a rapidly spinning neutron star is carried away by a relativistic wind and deposited at a large distance, in the nebula, downstream of the wind termination shock. The energy transport in the outflow is mediated by Poynting flux, but it is not clear how the energy stored in the fields is transferred into the energized population of emitting particles. The most plausible dissipation mechanisms are thought to be related to the "striped" structure of the wind, in particular, to the existence of a current sheet, prone to reconnection events. In this model the current sheet is a natural place for internal dissipation and acceleration of particles responsible for pulsed, high-energy emission. Moreover, reconnection is a promising scenario for explaining annihilation of fields at the shock and conversion of their energy into the kinetic energy of particles. The shock structure, however, is likely to differ in the low-density plasmas, in which non-MHD effects intervene. In this regime, the striped wind can dissipate its energy via an electromagnetic precursor of the shock.