With the growing complexity of systems that can be treated with modern electronic-structure methods, it is critical to develop accurate and efficient strategies to partition the systems into smaller, more tractable fragments. We review some of the various recent formalisms that have been proposed to achieve this goal using fragment (ground-state) electron densities as the main variables, with an emphasis on partition density-functional theory (PDFT), which the authors have been developing. To expose the subtle but important differences between alternative approaches and to highlight the challenges involved with density partitioning, we focus on the simplest possible systems where the various methods can be transparently compared. We provide benchmark PDFT calculations on homonuclear diatomic molecules and analyze the associated partition potentials. We derive a new exact condition determining the strength of the singularities of the partition potentials at the nuclei, establish the connection between charge-transfer and electronegativity equalization between fragments, test different ways of dealing with fractional fragment charges and spins, and finally outline a general strategy for overcoming delocalization and static-correlation errors in density-functional calculations.