What's replacing animal testing?

This is a pretty straightforward question: with all of the propaganda about how many companies are now giving up animal testing, I’m curious about what is replacing it.

Do scientists just guess at how a product will affect humans?
Do we pay human volunteers to wear the products?
Have we stopped making new formulae?
Is the propaganda wrong?

I know this is a very sensitive subject, but I’m looking for factual answers. I ask ahead of time that a mod close this if it turns into an animal-rights debate.

I don’t have all the details in my head, but I know that some extra-corporal tissue testing is done (might have botched the terminology there).

The idea is that you get a sample of skin tissue, or mucous membrane, or maybe eyeballs – whatever you need – from naturally dead subjects (which might be dead animals, or might be human cadavers). In some cases, tissue can be extracted painlessly (cheek swabs in humans, for example).

Then you apply the chemical in question, and check out the results under a microscope to view the potentially damaged tissue. Other kinds of tests would be used too, I am sure, to further check for damage.

I understand also that there are computer “tissue” models which can help predict whether or not Substance X made with Chemicals Y and Z would harm a given tissue. This is probably not 100% precise, however.

Here’s a site with links to several white papers put out by the John Hopkins Center for Alternatives to Animal Testing (CAAT). Review the Executive Summaries of each papers to get an overview.

Where I work, we use college students. Cheaper than rats, and the technicians don’t develop any emotional attachments.