As most will agree, desiccant FILTERS are rubbish. It's a waste of money.
Install a refrigerated air dryer. If your compressor doesn't have an after-cooler, get a high temperature rated dryer.
Desiccant dryers are used for special applications, like in hospitals or breathing air. If you do however decide to install a desiccant dryer, make sure to install a oil filter (coalescing filter) before it. Oil will ruin the desiccant in no time! Also, install a dust filter after the dryer to remove any desiccant particles.
Again, refrigerated dryers are much cheaper and better suitable for this application. Condensate water would normally be automatically be discharged by an automatic drain.
All you ever wanted to know about compressed air dryers can be found here:
http://www.air-compressor-guide.com/compressed-air-dryer.htmlMake sure to click through to the pages about desiccant dryers and refrigerated dryers.
Also, check that the drains (on your air receiver, on your dryer, etc) regularly. They are often full of dirt and stop working because of that..
[This message has been edited by air-compressor (edited 10/30/2012 4:19p).]