The hydrophobic effect--the tendency for oil and water to segregate--is important in diverse phenomena, from the cleaning of laundry, to the creation of micro-emulsions to make new materials, to the assembly of proteins into functional complexes. This effect is multifaceted depending on whether hydrophobic molecules are individually hydrated or driven to assemble into larger structures. Despite the basic principles underlying the hydrophobic effect being qualitatively well understood, only recently have theoretical developments begun to explain and quantify many features of this ubiquitous phenomenon.