I have used similar set up. I would say that with lava rock it would handle a 50g @ 400gph more if you add a mechanical sponge box as a prefilter, double that if you use nylon pads. A 30g pickle barrel set up using a 1600gph pump and a splash board return can handle a 500g pool at moderate stocking levels easily
It's a bulkhead fitting in the side of the bucket. And it does work...I just built one. I used the scrubbers that Oddball mentioned though instead of lava rock. It's working quite well. I used a 600 GPH pump but I had to choke it back to 500 GPH to keep from filling the bucket. The only downside (besides appearance) is that every 30 seconds it makes a burping noise. Other than that it's great. I also used a "T" off of the bulkehead fitting and installed a 3/4" hose adapter and a valve. If I close the valve the filter will power drain the tank in no time flat.