I have installed two of these the first one I did the way you are doing and it did not work very well. I ran the discharge along the firewall and connected it to the heater lines coming out of the firewall. This way it takes the coolant from the bottom of the block and circulates it to the top of the block. Works way better and heats up the whole engine.
Cheers
How long do you run the heater for it to heat up the whole engine? and what heater do you have, the 1000Watt? i may do this little mod since mine still didnt warm the engine after 4 hours of running.. and its only like -9 outside!