I have a 36 PD and was wondering if I should have a fuel/ water seperator? What is the reason exactly for one? Also where is the best place to get one? I looked at the local marine dealer and the ones they had was huge and took a regular spin on fuel filter. I was looking for something smaller and maybe clear kinda like the sedament bown on an old john deere tractor or something. Also if I install one of these do I still need to run my in-line fuel filter or will the filter in the fuel/ water seperator be enough?

Yes, get a racor 120. Do a search on Internet. I left my inline filter in place, I haven't had any problems.