The way russ described it is one way to setup a livewell. It takes two pumps and would work great. Especially if your in salt water and cant pull water out of the lake you still have a method to recirculate water..
Another option is like this.
You have a pump out the transom below the waterline. This pumps water to the spray bar above the "livewell waterline" This will fill the livewell and the spraybar will mix o2 with water.
You then put a overflow in the side of the livewell. The overflow drains out the side of the boat. You will want to drill the overflow in the livewell an inch or two below the top of the livewell and the hole in the boat 1/4" below the livewell hole. The drain will also be larger then your pump line. If you look at this kit. http://www.cabelas.com/p-0001659012937a.shtml
you will see how it works. The 3/4" hose runs from the pump to the spray bar. The 1 1/2" hose runs out the side as an overflow.
now, you turn on your transom mounted pump and fill up the livewell. Then you adjust the spray bar so that it only flows as much water as will dump out the livewell overflow. Then you can run the pump all day long if you wanted and it will just dump out the side. The best option is to put the pump on a timer so that it runs for 1 minute every 5 minutes or something to that effect. You can find a bunch of different options on live well timers.
Finally you put another drain in the bottom of the livewell towards the back of the boat. This drains out the back of the boat right next to where your pump is. It can go anywhere you like really, but thats an easy place to put it. When we did my bud's 14' alumacraft we didn't have room to run the drain out the back of the boat so we went straight out the bottom below the livewell. I used fittings and hose for this that you can buy individually and so its not difficult to piece it together. I am not sure if they make different size fittings or not so if you go this route then you can grab a boat plug from the shelf and make sure it will stick into the fitting. I am pretty sure they are standard sized.
When you are using the livewell you put a standard boat plug in the bottom drain. When you are done with the livewell you pull that plug out of the bottom of the livewell and it will drain.
With a setup like this you are brining fresh water into the boat from the lake so you don't need to run a recirculating pump. Put your livewell pump on a timer and its a done deal.
Now to be honest, I have my livewell setup like this but I am thinking about changing the setup when I put my boat back together. I am thinking about adding a recirculating pump. I am thinking about adding a second smaller livewell to my boat. I want to be able to seperate my catch from my bait. I now just toss my minnows and leaches into my livewell. I am thinking about adding a new pump that will draw out of the bottom of my current livewell and spray into a new smaller livewell. The overflow from the smaller livewell will flow back into the larger one. I don't quite know how I will figure this out but I am thinking on it.
I also did a quick search on recirculate vs timer/fresh water method. Here is something I didn't consider.
Livewells can be operated to pump in fresh lake water or
recirculate livewell water. A recirculating system is es-
sential to provide aeration when the boat is on plane, when
the boat being trailered, or when you are controlling livewell
temperature (see below). If your boat does not have a re-
circulating system, add one. Brands of boats differ, so be
sure you understand the livewell control settings for fresh
water intake and recirculation.
On plane and on trailer are some valid reasons to have a recirculate pump. This is a darn good read.
Keeping bass alive.http://tinyurl.com/yjlor8g
It is making me rethink the recirculate method.