Bypass filtration does work,and can greatly extend oil change intervals.You can pick up better and cheaper units out there,just shop around.Some can even be made to use a roll of toilet paper as a filter (new of course :lol: ).
They need to be plumbed into anywhere you have oil pressure.It can be at the filter,cyl head,whereever there is oil pressure,it doesn't matter.
Iit is very low flow,they use an inline restrictor,so oil can be returned anywhere.The valve cover makes the most sense,as it's easy,and very little chance of leaks,unlike the oil pan.
To make these things work,you need to use a very good quality synthetic oil which supports long drain intervals.You still need to change filters (both the main oil filter,and the bypass),at normal recommended intervals.You have to add makeup oil for the filters,and anything lost between changes.You need to do oil sampling,to see when the oil starts to breakdown,or if it is getting contaminated\dilluted.If you stick to the routine,they work.
For most people,it's way to much work,and too much money to put on a regular everyday car.You also must drive a lot of mileage to make it pay off.That is why you usually only see these systems used on big long haul trucks.There is too much oil contamination on vehicles used for short trips and stop and go driving.
By the time you add up your costs,for the filter kit,all the plumbing,etc,the filters,makeup oil,the original cost of extended drain synthetic,etc, it will be more cost effective to just do a regular oil change at the recommended interval.Why reinvent the wheel ?