I stumbled upon this discussion yesterday, and decided to join the group just to comment. I was impressed by several very good and correct comments, and saw a few misconceptions. I'm a 25-year-plus HVAC and plumbing engineer.
The manufacturers can provide info. People behind the counter at local supply houses probably won't have the depth of knowledge you people are looking for - you already know a lot. I'd think the commercial sales reps would be as helpful to the end users as they are to us engineers. Look for your local Taco and Bell & Gossett (B&G) reps online. B&G, as part of ITT, wrote "the bible" on hydronics, air separation, expansion tanks, and pumping. ITT just recently spun off B&G and related businesses as Xylem (named for the part of plants that moves the water up the stem, cute). In New England, Taco rep is Emerson-Swan, and B&G rep is FIA (Fluid Industrial). B&G/ITT has great handbooks that I got long ago in hard copies - I don't find them online though.
Generally, the automatic water makeup, air separator, and expansion tank should all be close to the inlet side of the hot water pump. That's where the water pressure is lowest, so air separation works best there. Also hopefully the pump is downstream of your heat source (boiler etc.) so the water is warmer, helping bubbles come out, not critical in small low-pressure-drop residential systems.
There's nothing wrong with automatic water makeup (with proper reducing valve and backflow prevention) in a plain-water system, but we avoid them in systems with antifreeze to avoid unknowingly diluting the fluid and causing a freeze. Without automatic makeup, you have to somehow pressurize the system - the expansion tank won't do it for you.
I appreciated the comments calling for a shutoff valve and drain in the expansion tank line. That is a must for properly charging the tank air pressure. I've met few plumbers who understand this.
The suggestion to locate the expansion tank upstairs will not help, particularly assuming we're talking about the type of tank with a bladder or diaphragm. Non-bladder types work quite differently, and need the air bubbles from the separator piped to rise into them. With bladder type you relieve the air bubbles into the room, and eventually you've gotten virtually all that corrosive oxygen out.
Also, the idea of bleeding off tank air to adjust the system pressure is wrong, assuming the pressure was set properly offline. As others rightly said, that reduces the amount of expansion the tank can absorb, and will actually lead to higher pressures and more chance of blowing the relief valve.
The makeup water pressure is set with pumps off, and preferably with the system at room temperature. The 4 psig suggestion is correct and typical, as Mr. Dudley said this is to keep bubbles from coming out at high points (which can air-bind the system) and to have just a bit extra. 12 psig is a typical setting, but the way to calculate it is by converting the vertical system height (between fill point and high point) from feet of water to psi, and adding that value to the 4 psi. Tank initial air pressure is the same as the water fill. We say psiG to distinguish Gauge pressure from Absolute (psiA).
The expansion tank's functions are to provide a place for expansion (and avoid blowing the relief valve), and to create a "point of no pressure change" at the pump inlet. You want the pump inlet at a positive pressure to avoid "cavitation" which is damaging to the pump impeller. And you want the makeup pressure reducing valve to always see true system pressure, so it only opens when more water is needed. Again, no biggie in low-pressure residential stuff. But if you have expansion tanks in more than one place (or a big bubble at the top of the system acting like an expansion tank) the pump won't be happy.