Copied from the above site:
It works in this fashion in your house. You already have half of the loop in place. This is your hot water piping distribution system which begins at your hot [FONT=arial,trebuchet,verdana,sans-serif]water heater[/FONT]](http://www.askthebuilder.com/B413_Hot_Water_Recirculating_System_-Installation_Tips.shtml#) and ends at the farthest [FONT=arial,trebuchet,verdana,sans-serif]fixture[/FONT]](http://www.askthebuilder.com/B413_Hot_Water_Recirculating_System-_Installation_Tips.shtml#) which requires hot water. If you were to install copper piping leading back from the farthest point and from other high points in the existing system, you would have a loop. This return loop connects into the bottom of the hot water heater where the current drain valve is located. It is that simple.
Looks that way to me, Mike.
It would not be a supply line, the water in the bottom of the tank being cold.
It is an awkward location for return lines and not necessary IMO. Tapping into the cold supply down tube at the top of the tank should accomplish the same thing, less confusing for inspectors, less likely to get knocked loose. :neutral: