For a small boat the Federal Regs require that you pretty much hhave to install and use a
holding tank to properly dispose of waste. I suspect that ''use'' portion of this is one of the most frequently broken Federal laws with prohibition and the 55 mph speed limit a close second and third. Portapotties are a less than perfect solution but they are simple to use, cheap to buy and reasonably reliable. Marine heads and
holding tanks are more expensive, but offer a more permanent and less olefactory pervassive installation.
Properly installed, and maintained you should not be aware that a holding tank is even on board. The best article that I know of on this subject was written by Peggy Hall and can be found at: http://www.boatsafe.com/nauticalknowhow/phall.htm
Good luck
Jeff