A water heater bypass is used to, well, bypass your water heater.  Why? There are several reasons to mod your travel trailer, or popup camper plumbing system with a bypass but the most popular is for winterizing.  Your camper water heater typically holds 6 gallons of water.  In order to prevent having to fill your water heater completely with antifreeze during winterization, a bypass is installed to eliminate the water tank from the camper plumbing circuit, and so both the hot and cold water systems are tied together.  This can save you a lot of money and it makes de-winterizing much easier.

1) The first thing that needs to be done is to drain the water heater. Locate the water heater on the outside of the RV and lower the access panel. Near the top of the tank is a pressure relief valve with a lever on it. Carefully move the lever upward to release any air pressure in the tank. Now remove the drain plug at the bottom of the tank. Take care to quickly remove the plug once the last thread is reached and step to the side, otherwise you'll be in for a good soaking. The plug can sometimes have a long rod (called an anode rod) attached to it so you'll have to pull it out a ways to remove it. Let the tank drain completely.

2) Locate the water heater inside your RV. Most often, it is located inside a kitchen cabinet or under a dinette. We will be working on the back of the tank so remove any drawers and anything else that will give you some elbow room. On the back of the tank at the bottom is the cold water line and at the top is the hot water line. These lines are generally colored blue and red respectivley, but some are just a milky white color.

3) Now it's time to get brave and cut the lower tube at the attachment point to the tank, leaving at least 1" of tubing protruding. Install a 3-way valve from the kit in the lower pipe with a handle easily accessible. This is done by sliding the nut over the tubing, rocking the tubing on to the flared fitting on both ends, and tightening the nuts on the fitting. The center port of the valve should be facing toward the installation point of the second valve.

4) The second valve is installed in a similar manner. Note that the valve handles should be on the opposite side of the tubing. That is, if the valve is facing to the right, the other valve handle should be facing to the left. This ensures the valves properly bypass the water supply to the tank and are easy to operate.

5) Finally, install a piece of PEX tubing supplied in the kit between the two center ports of the the 3-way valves. Cut the tubing to length and assemble in the same manner as the valves. The ports should be facing each other top to bottom so the tubing should be vertically oriented after installation. Other configurations my be necessary due to space issues or non-standard factory tubing connections. The bypass kit is now completed.

6) Now it's time to winterize. See the resources below for a link on how to winterize your RV. Be sure to check for leaks when the system is pressurized so as to ensure total protection from freezing lines.

SOURCE: http://www.ehow.com