Recently I upgraded the coolant system on my mill for pretty cheap. I was using a 2 gallon open top dish pan for the coolant with just a piece of screen over the drain for a filter. I was finding lots of chips in the bottom of my coolant pan and a lot of evaporation going on which turned the coolant to a viscous slime.
So I went out and bought a 10 gallon close-top container, added a finer screen filter for the large chips, and am now using a felt particulate filter to catch all of the small stuff. So far it has worked great and kept the coolant very clean. I also added 2 fish tank aerators to keep it stirred up everyday. I still have to make my new way covers for the mill so the coolant doesn't wash so much way oil away (which ends up in the coolant tank) but that will come soon enough.
More information and pics on my coolant system can be found at:
http://www.warpedairsmithing.com/shopprojects.asp