From what I have seen the main horizontal pipes angle tip back to the compressor. Then the vertical takeoffs first go up from the horizontal and then back down with your air takeoff 18" or so up from the vertical bottom. At the bottom of the vertical is a drain valve.
You might also search around for homemade air coolers. The ones I have seen are right off the compressor going to a big diameter 'pipe/receiver'. Maybe 4" diameter and 6-8' long set vertically. The compressor air is fed into the pipe side half way up (I think) and in the pipe there is an elbow that immediately directs the air down. There is a drain at the bottom of the pipe and the air is taken off the top of the pipe and run through a S shaped series of pipes before heading for the main delivery pipes. The S shape is vertical.
Search around this site for particulars and other ideashttp://www.shopfloortalk.com/forums/index.php
I have a Motorguard filter that keeps my air dry for my plasma cutter. Its the filter that uses a cartridge that looks like a roll of toilet paper. Flows lots of air. About $100.