Actually it's designd to hold the oil in an upright cylinder rather than an oil pan, therefor eliminating the posibility of oil starvation due to surge on hard cornering, I havent heard of of having the oil higher than the engine, the oil will still take the same route through the engine as before.
EDIT: Taken from wikipedia
A dry sump is a lubricating motor oil management method for four-stroke and large two-stroke piston internal combustion engines that uses a secondary external reservoir for oil, as compared to a conventional wet sump system.
Four-stroke engines are lubricated by oil which is pumped into various bearings; and thereafter allowed to drain to the base of the engine under gravity. In most production automobiles, which use a wet sump system, this oil is simply collected in a 3 to 10 litres (0.66 to 2.2 imp gal; 0.79 to 2.6 USgal) capacity pan at the base of the engine, known as the oil sump (or oil pan in American English), where it is pumped back up to the bearings by the oil pump, internal to the engine. In a dry sump, the oil still falls to the base of the engine, but rather than being allowed to collect into an oil sump, it is pumped into another external reservoir by one or more scavenge pumps, run by belts from the front or back of the crankshaft. Oil is then pumped from this reservoir to the bearings of the engine by the pressure pump. Typical dry sump systems have the pressure pump and scavenger pumps "stacked up", so that one pulley at the front of the system can run as many pumps as desired, just by adding another to the back of the stack.
A dry sump offers many advantages, namely increased oil capacity and a lower center of gravity for the engine. Because the reservoir is external, the oil pan can be much smaller in a dry sump system, allowing the engine to be placed lower in the vehicle; in addition, the external reservoir can be as large as desired, whereas a larger oil pan raises the engine even further. Increased oil capacity by using a larger external reservoir leads to cooler oil. Furthermore, dry sump designs are not susceptible to the oil starvation problems wet sump systems suffer from if the oil sloshes in the oil pan, temporarily uncovering the oil pump pickup tube. Having the pumps external to the engine allows them to be maintained or replaced more easily, as well.
Dry sumps are common on larger diesel engines such as those used for ship propulsion. Many racing cars, high performance sports cars, and aerobatic aircraft also utilize dry-sump equipped engines because they prevent oil-starvation at high g loads, and because their lower center of gravity positively affects performance.
On the downside, dry sump systems add cost and complexity, and the extra pumps and lines require more oil, so maintenance costs may rise accordingly.
well done , a very comprehensive summary of the subject .
an explanation of the process of operation , the original oil pump is removed ,usually 3 oil pickup points ( inlets to the scavenge pumps ) are installed in the existing sump or to a custom sump . They remove the oil as it becomes available , pumping to a remote reservior ( the advantage here is you can locate the mass further back and improve roll centre ) the pressure pump then pumps the oil back into the lubrication system to repeat the process .
as a foot note all scavenge pumps use the last piggy backed pump as the pressure pump ( the pump that pumps the oil into the oil gallerys ) this is not the usuall practice in hydraulic systems as the engineering standard is to place the pump doing the most work first on a piggy back pump set . why it it the opposite i dont know