Here's the setup, it's been modified since dec-2011 but the concept is the same.
The air bleed valve is on the output before the ball valve so it always has access to any air. Since wort will be going into the unit you should run clean it out after each use, i run hot water through the entire system anyways so no biggie for me. There is a little black screw on the top of the unit, make sure that's open, that's where the air vents out. If it's tightened then it doesn't work.