There you can see water/air cooler used in OM606:
http://www.mersuforum.net/forum/viewtop ... 34#p644234" onclick="window.open(this.href);return false;
There is one bad issue, the water inside cooler is going to heat because the engine is warm and the cooler is connected to the engine through inlet manifold which conducts heat quite well, especially this happens while the car is not moving, a kind of thermical isolation is needed (silicone tubes or kind). With this setup of inlet manifold they were able to get low 10 second E.T times on queter mile and speed >208 Km/h las summer, so i would like to say it woks quite well.
Short runners of inlet manifold is bad issue in turbo engines, try to avoid that. The lenght of original 606 is quite good compromise. water/air cooler can obsiously be placed anywhere, longer tubes for boosted air are not anykind of problem.