From what I have read from posts, oil is in evaporated form coming from top of cylinder head. The cans center pipe feed down to lower part of can allowing vaper to cool. This allows the oil to condence and drop out of suspension to bottom of can. Clean, oil free air flows into intake per infeed behind throttle body. In a nutshell that's my take on what I have read. In the first thread posted by Bee Sting, there is a pic with cut away view of can, and a much better explanation.
