Despite the chemical and structural simplicity of MgB2, at 39 K this compound has the highest known superconducting transition temperature (T-c) of any binary compound. Electron doping by substituting Al for Mg leads to decreasing T-c, and the observed concentration dependent rate of decrease has been proposed to arise from the nonideal character of MgB2-AlB2 solid solutions, which derives from the existence of an ordered Mg0.5Al0.5B2 compound. Heterogeneous nanoseale structure patterns in solid solutions have emerged as an important concept for complex materials, ranging from actinide alloys and oxides to high-temperature cuprate superconductors and manganite-based materials exhibiting colossal magnetoresistivity. In this work we investigate the formation of structural heterogeneities in Mg1-x,Al-x,B-2, which take the form of nanoscale Al-Al and Al-Mg domains of different geometries and sizes, using molecular statics and Monte Carlo simulations, and in particular we study the corresponding signatures in diffraction experiments. In order to undertake this task, we first derive appropriate Mg-Al-B semiempirical potentials within the modified embedded atom method formalism. These potentials are also applied to explore the equilibrium Mg1-xAlxB2 phase diagram for 0 < x < 0.5. Additionally, density functional theory calculations were utilized to study the influence of heterogeneities on the electronic structure and charge distribution in Mg1-xAlxB2.