Oil Catch Tank or can sometimes known as the oil-air separater is placed between a pipe running from the valve cover to the intake pipe. Due to the low and high pressure effect oil is sucked into the intake via the pipe from the valve cover or tappet cover. The catch can acts as a reservoir for the oil blown out of the outlets of the tappet cover. Instead of being tapped back into the intercooler piping before the turbo, and also directly into the plenum as is standard procedure, the 2 lines both run into the catch can.
Any oil that comes out of these lines then is trapped in the can, with no oil being recirculated back where it isn't needed. Every few months its a simple matter of letting the excess oil drain from the drain plug at the bottom of the can. This avoids the common problem of oil all through the intercooler piping, intercooler plenum and vacuum lines, and ensures that only clean air is circulated in these areas and eventually burnt in the motor.
The tank is good in turbo or supercharged cars where it has the most benefit due to higher then std atmospheric pressure levels. This actually improves performance coz oil in the combustion chamber can knock the octane level down and poor combustion
Here some pics to show how it looks and works