In recent years, substantial progress has been been in the use of satellite sounding data in numerical weather prediction, leading to impressive improvements in forecast accuracy. Advances in this area have included the trend towards direct assimilation of radiances, in place of assimilating retrieved temperature and humidity profiles. The theoretical and practical reasons behind this trend will be considered. Key issues concerning the effective use of satellite sounding data in NWP will be discussed, and those which are applicable to more general retrieval/assimilation problems will be stressed. Outstanding problems in the assimilation of microwave and infra-red sounder data will be discussed.