Direct insight into the mechanisms of flow and displacements within small-scale (cm) systems having permeability heterogeneities that are not parallel to the flow direction (cross-bedding and fault zones) have been carried out. In our experiments, we have used visual models with unconsolidated glass bead packs having carefully controlled permeability contrasts to observe the processes with coloured fluids and streamlines. The displacements were followed visually and by video recording for later analysis. The experiments show the significance that heterogeneities have on residual saturations and recovery, as well as the displacement patterns themselves. During a waterflood, high permeability regions can be by-passed due to capillary pressure differences, giving rise to high residual oil saturations in these regions. This study demonstrates the importance of incorporating reservoir heterogeneity into core displacement analysis, but of course the nature of the heterogeneity has to be known. In general, the effects created by the heterogeneities and their unknown boundaries hamper interpretation of flood experiments in heterogeneous real sandstone cores. Our experiments, therefore, offer clear visual information to provide a firmer understanding of the displacement processes during immiscible displacement, to present benchmark data for input to numerical simulators, and to validate the simulator through a comparison with our experimental results for these difficult flow problems.