This review focuses on recent progress in two areas in which computer simulations with explicit solvent are being applied: the thermodynamic decomposition of free energies, and modeling electrostatic effects. The computationally intensive nature of these simulations has been an obstacle to the systematic study of many problems in solvation thermodynamics, such as the decomposition of solvation and ligand binding free energies into component enthalpies and entropies. With the revolution in computer power continuing, these problems are ripe for study but require the judicious choice of algorithms and approximations. We provide a critical evaluation of several numerical approaches to the thermodynamic decomposition of free energies and summarize applications in the current literature. Progress in computer simulations with explicit solvent of charge perturbations in biomolecules was slow in the early 1990s because of the widespread use of truncated Coulomb potentials in these simulations, among other factors. Development of the sophisticated technology described in this review to handle the long-range electrostatic interactions has increased the predictive power of these simulations to the point where comparisons between explicit and continuum solvent models can reveal differences that have their true physical origin in the inherent molecularity of the surrounding medium.