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Depends on the model but either in a tank or down the drain. Some have the option to do both.
They work very similarly to condenser dryers but are cheaper to run, therefore much more energy efficient, because there is a heat exchanger that recycles the warm air while removing the moisture. Mine is actually cheaper to run than its washing machine brother.
Bobbo
CheeseWheel
Thanks for all the tumble dryer advice folks. We currently have a combined washer-dryer which pumps all the steam out into our poor quality extension and makes the room really damp. So, initially, I thought we'd need a vented tumble dryer to make sure all the damp goes outside. But condenser looks like it might be ok at not making the room damp? Where does all the water go on the heat pump dryers?