In what situation do I use powerheads?
I posted but I dont recommend them now knowing their drawbacks (eat power, and are not very efficient)

What function does a close loop give?

Where does my return line enter my tank? ; Does it come over the top, or does it need to be drilled?
Depends on the tank, my tank had a pre-drilled overflow with exit and return line in the same corner. Over the top is not unheard of.

What risks for natural syphoning are there, and how do I avoid them?
The usually put little holes on the highest point of your return but the problem with this (at least that I had) was that it would shoot micro bubbles into the tank, so I instead just placed the return right at the water line in the tank, so it would siphon a gallon of water MAX and soon hit air. (remember siphoning only happens when the power goes out)

Valves, which ones do I use, and where all do I put them?
I did not use any valves, I know alot of people use them for simplicity in having to move things or if they want to easily disconnect reconnect items. Maybe some people can post pics of their plumbing.


Remember that you want alot of flow but not so much pressure.