I've spent a lot of $$ figuring out plumbing... I was on a first name basis with the guy at HD!
A closed loop means you drain water from your tank directly to a pump and then return it to the tank directly via several outlets, hence, closed loop (the water never leaves the pipes). This distributes flow and eliminates power heads in the tank. So instead of X number of power heads, you have one larger pump servicing intank water circulation.
My CL is for mid to lower tank flow, my returns do upper tank flow. I do not feel a manifold (pipe around the top) accomplishes this.
This is my first reef tank, so take it for that, but here is a pic of my recently completed and approved plumbing: The small diameter spa flex tubes are my returns, they run from the sump up and over each back corner. They are split, in sump, by a SCWD (alternating flow device) and end up at the front corners pointing down and towards the back.
The 3 pipes in the middle are my closed loop. The center one is the drain and the 2 pipes flanking the drain are the closed loop returns, which then split in the tank to 3/4" loclince for a total of 4 outlets.
The right hand pipe is the overflow drain which dumps into the sump - skimmer/fuge/return.
Several key learnings:
1) Use as large a pipe as you can for anything going to or coming from a pump. Larger pipe = more water moved = more flow! Flow is your friend.
2) Realize you are going to make plumbing mistakes (like forgetting to put the female union threaded piece onto the pipe BEFORE gluing the pieces together!!! I did this twice...) Dry fit everything first. Get a sanity check, then commit. Also, buy at least 2 of each fitting when you get your plumbing, you can always return what you do not use...
3) There is more than one way to skin the cat!
Reef on!!
T