Extinction of species
This is a common misconception about evolution, many skeptics ask something along the lines of "If humans evolved from monkeys, why are there still monkeys?" The answer is that evolution is not a linear process of one species becoming the next species becoming the next. Species branch off much more like a tree. At some point in the past the last common ancestor of humans and monkeys split into two directions, one that became the apes including humans, and one that became modern monkeys. Evolution did not stop for either branch, but only our branch became humans, after several more branchings. Sometimes species adapt and evolve without major changes in morphology, for example modern turtles look a lot like turtles from 100 million years ago, but this doesn't mean they haven't evolved.

The intermediate species are often lost with time as environmental conditions and competition changes. For example, if one early human group found itself competing with a slightly more advanced human group with better tools, the more primitive group would have trouble getting enough food and eventually die off, leaving the more advanced group to pass its genes on.

Now, if those more primitive humans were more suited to a particular niche, they could survive there. Lets say they could climb trees better ( assume REALLY primitive ancestors, barely out of the forest ), they might survive in the forested areas while the more advanced groups become dominant in the grasslands. Something like this is why our ancestors didn't totally displace monkeys, the monkeys were better suited for their forested ecosystem. If those same monkeys had to live on dry savannas we would have eaten them all long ago.