Water recycling systems generally fall into two categories. Greywater systems recycle water from lavatories and showers, which may include soap and a small amount of organic matter, like hair. Blackwater systems treat water from toilets and kitchen sinks (which may include food waste) and often recycle the treated water for non-potable uses like flushing toilets.
The Solar Decathlon rules and those of the National Mall clearly prohibit the use of blackwater systems, but the LEAFHouse does include a greywater recycling system. The grey water is held in a tank, gradually filtered through a special planter bed, and used to irrigate the landscape around the house.
Herb Heubish talks about the grey water system.