A long time ago I read an article about a guy who recycled his own motor oil. He had a system where the used oil was first filtered through several (3-6?) rolls of toilet paper. This filtered out all the particulate matter, neutralized the acid components and actually replaced some minor chemicals of the oil that are also found in TP. The filtered oil drained down into a drum which was laying down on it's side. The oil was heated by a light bulb in this drum and this heating drove out the water. He had sent samples of his finished product in for testing somewhere and it came back as very, very close to fresh oil. He reused it over and over in his vehicles without any problems.
I think it was in Mother Earth News. I did a quick google search but couldn't find anything.
-Blast