I am a big supporter of the Ford AIS "Air Intake System" It is a severe duty intake for the 7.3's that replaces the entire factory intake and batt box system with a new, honeycomb "6.0" style airfilter. This filter is larger and filters more dirt and particals out then the factory system, yet allows more air flow. I have it on my truck personally. I have whitnessed people trying the under the hood big air filter setup but many have encountered more power but lower fuel mileage due to using hot under hood air rather then cool air from the outside. I love mine, here is what it looks like.

http://www.intellidog.com/dieselmann/AIS.gif

 

The Ford AIS kit works great and a fender sleeve provides additional air to the filter as well.