The fundamental aspects of ab-initio simulations of materials properties and of processes in materials based on density-functional theory, and their implementation at various levels of theory in the Vienna ab-initio simulation package are reviewed. The state-of-the-art is illustrated at selected examples, chosen from nanostructured materials, quasicrystals, surface science and catalysis. Finally a brief outlook is given on current developments attempting to make post-DFT approaches applicable to materials-science problems. Key words: density functional theory; materials science ; magnetism; quasicrystals; surface science; catalysis; intermetallics; post-DFT approaches