Dry sump lubrication is used in rally cars and ultra high performance track cars.
The general idea is to have an oil reservoir that is mounted above the top of the engine. The sump (engine pan) incorporates one or more drains and scavenge pumps lift the oil to the reservoir.
Engine oil therefore always takes a downward route through the engine.
Its only purpose is to ensure full oil flow and pressure when the car is undertaking savage acceleration, braking and cornering duties repeatedly.
It's not de-rigeur even on high performance track cars, for road use I think it's needless regardless of how savagely you drive.
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.