This was posted on another tech forum (Boosted Hybrid). I hope this helps.
"There is two methods in which you can run the catch cans. One is to run the catch can system in the "open loop" set-up pictured above. You allow the oil to drain back into the block once its gathered in any amount at the bottom of the can. The second method is "closed loop", or to just run both the feeds into the can, and have the bottom plugged. At the plug there is usually a drain style fitting that allows you to drain the can periodically. Open loop is easy to maintain (nothing to really do), but closed loop is more effective since it doesnt allow any oil vapors to recirculate back into the block. I set up all my catchcans in the close loop set-up. The key thing to making the closed loop set-up work is mounting the catch can low in the engine bay to make sure that the lines coming into the can, can properly drain."
"You want to mount the can up high in the end bay so that the vapor can pass into the can, but the oil cannot (or at least slows it down considerably). You are correct that the breather in either situation closed/open loop will have atmospheric pressure within the can, but that is why you mount it up high in the engine bay."