The little breather gizmo with the freak is basically a small air filter that catches oil as it breathes back out of the motor. You need to drain them of the oil ocassionally as the original; setup sent this into the airbox, to go through the carbs to be burned up. EPA stuff.
A lot of us guys just took the breather hose and secured it so as it dripped oil, it went onto the chain. Kills two birds with one stone, and does you part for global warming.
Oh yeah, I did some dyno runs with and without just the Krankvent and there was NO increase at all. But the Harley shop says the main reasohn for them is to reduce the internal pressure in the case, under the pistons, which aids in keeping the gaskets and seals from blowing with the pressure on each downstroke. On older bikes they would pretty much stop the leaking issues you have.