There are a couple of plastic pipe materials that are "rated" for compressed air, but I'm with you, Jerry on the black iron pipe. It won't explode on you.
As far as piping compressed air, a generous water trap w/drain at the compressor before going overhead, then sloped down to the last outlet which should have another valved water trap at the bottom. Any intermediate taps between compressor should be taken off from the top of the main and then turned down to the outlet. They should probably also have at least a drip leg on the bottom as well, with the tap coming off the side of the drop.
Air can hold more moisture as it gets compressed (and heated up), and it loses it's capacity to hold water as it cools down in the pipe runs. A refrigerated dryer works fine immediately after the compressor as the hot air is passing over really cold (below dew point) surfaces which sucks the water out. But letting it cool down first works as well, just adds more pipe to the system.
