Well said C J Driver, a good explanation in easily understood terms.
I would like to add 2 points addressed to kuobin's query regarding the EFFECT upon FMS / FMC equipped aircraft -
(1) It should be remembered that many SIDs, STARs, and Non-Precision approaches are based upon VORs, each of which may well have a small degree of scalloping (most do to a small degree). This is well within tolerances, and, airways surveyors have flight tested the applicable procedures based upon VOR indications, not what they should indicate in an ideal world. It is essential therefore, that when flying a SID, STAR or VOR approach using the FMS for tracking, that the VOR be simultaneously monitored for deviations within the laid down tolerances (normally 1 dot or half a dot). If VOR indications were to move outside tolerance, then reversion should be made to Radio-Nav indications. During a VOR approach, it may well be more appropriate to carry out a missed approach.
(2) If you DO have a multi-sensor FMS, VOR indications may well be a part of the position update to the Inertial position. Admittedly, VOR update comes after GPS, LLZ/DME, DME/DME in the 'pecking order' for most reliable position, but there are many instances where a single VOR/DME couple may be the only external reference for update. You should be well aware of unreliable or scalloping VORs from NOTAMs / Airways Manual etc. so these rogue VORs can be VOR inhibited on your FMS.