Using navigation systems in general orthopaedic surgery and, in particular, knee replacement is becoming more and more accepted. This paper describes the basic technological concepts of modern computer assisted surgical systems. It explains the variation in currently available systems and outlines research activities that will potentially influence future products. In general, each navigation system is defined by three components: (1) the therapeutic object is the anatomical structure that is operated on using the navigation system, (2) the virtual object represents an image of the therapeutic object, with radiological images or computer generated models potentially being used, and (3) last but not least, the navigator acquires the spatial position and orientation of instruments and anatomy thus providing the necessary data to replay surgical action in real-time on the navigation system's screen.