Justin (and others!)
When the oil filter is made an integral part of the oil pump cover, (and the pump remains otherwise unchanged) the manufacturers of the filter/cover tell you that the oil is sucked into the pump, and the pressurized oil from the pump first goes through the cover, through the filter and then back into the pump on the output side to continue into the engine.
However, since the original pump outlet port is still functional, only a percentage of the pump output actually goes to/through the filter. Then, as the filter gets full of dirt and the pressure through the filter increases, more of the pump output bypasses the filter and takes the path of least resistance - directly out of the original pump outlet, back into the engine, contamination and all...
A proper "Full Flow" system has the oil pump outlet blocked off with a steel plug, threaded into the outlet port, to stop any flow in that direction. Then, a different cover is used that has only an output port on it with a hose fitting attached. The oil pump inlet port remains unchanged. The oil filter is mounted to the car's frame off to the side (or rear) of the engine, and 1/2" hoses are run to and from the filter. The pump outlet (cover) hose goes to the filter "in" side, and the filter output goes through another hose to a fitting on the rear of the engine. This fitting does not exist on "stock" engines (there is a plug where the inlet would be), and must be drilled and tapped for a 1/2" hose fitting. This is best done when the case halves are apart, but it CAN be done on an assembled engine, still in the car (I've done this). Once installed, this fitting sits at the rear of the main oil line running through the engine, just about where it would have gotten oil from the original pump set up.
Now, since ALL of the pump's output MUST go through the cover and out to the filter, it is called a "Full Flow" system. Unfortunately, because of the engine/pump design, this pump output is full pressure, as the oil reaches the oil pressure regulator only after going through the filter and back into the engine, where it then gets regulated to protect the engine and stock cooler. This means that a special, high pressure filter must be used (FRAM HP-1 or WIX racing filter or K&N High Pressure - all readily available) and if an external oil cooler is used it must be able to tolerate about 300 lbs pressure (most of the popular ones, like DeRale, do). Alternatively, you can use a Gene Berg, Pressure Regulated, Full Flow output cover to hold the filter/cooler pressure to 125 lbs. and protect everything.
That's it in a bit nutshell. Hope this helps...you can also do a search on this forum for "oil Cooler" and see the write-up I did last Summer for a little more detail. I can email over some pictures of the drilling/tapping of the inlet fitting if you wish, just ask.
GN