There are a few ways that they typically tie back into the system with the most popular being the cold water supply line. Some water heaters have a dedicated port while others do use the drain valve.
Now as for your "timer" set-up, may I recommend you spend a few extra dollars and install a RF "on-demand" system. Instead of wasting the electricity circulating the water around when there is no call for it, you simply press a button as you get ready for your shower, getting ready to do dishes, etc. When you are ready, the hot water will be there.
This will also help reduce your cooling loads as you are not constantly losing that heat from the lines.
For more information:
Read "Do hot water recirculation systems work? What kind would you recommend?" a Q&A answered by Kevin Burrell.
Read Sean's blog post "Fix a Leak with the WaterSense Program".