My recomendation is to get some runtime on it, then switch it over to synthetic recip. compressor oil, Ingersoll Rand makes a good oil but a bit expensive, I sell Amsoil and they make a good compressor oil that is much cheaper...
As far as the filter, I run mine right off the air tank, it has a drain built in to it, as far as the tank drain, do yourself a favor and get a 90* elbow and a ball valve in the size of the drain hole and plumb it out from under the tank.
10 scfm is not a lot of air for sparaying, keep an eye on the runtime, the more a compressor runs, the more moisture you have to deal with.
GT