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Your right, in that sealed system any vapors that travel through the filter get the opportunity to be burned in the engine. Like mentioned fluid can be drained and recycled or disposed of in some other responsible manner. Mine is also sealed like the above setup, except I empty the liquid oil into my crankcase after it is filtered through Terry cloth.
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 2002 VW Jetta TDI 5-speed(completed 01M-5-speed swap at 155K miles) 45 MPG City with the 01M, 5-speed 60+ MPG City. Nokian Entyre Low RR Tires. Experimenting with the "Hybrid" 205 Deg F T-stat:
http://forums.tdiclub.com/showthread...=306799&page=4
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