I've played with a few combination, built a few different setups and finally have a simple, cheap setup that works.
One, nothing is going to work well at the compressor, the air temp is just too high there. You need to get at least 20-30' of line between it and the drier assembly.
Do a web search for a "franzinator," it's a separator similar to what was already described here as made out of a driveshaft... After making a few I will say that the HF separator basically does the same thing and by the time you build your own, kill all the leaks... you'll be better off spending the money at HF:
my setup ended up with about 30' of 1/2" from the compressor to my filter/separator assembly. That is connected to a standard inline air filter (one of the deals with the clear bowl on the bottom, mine is actually the big Kobalt one), connected into the HF drier, and then that is connected to an motorguard M60, the outlet of that assembly is split into 2, one going straight to the basement hose reel, the other to the garage.
This setup works great for painting, running a plasma cutter, blasting cabinet...