The filter will work either way. It is essentially a lowpass filter, which allows the 60 Hz to pass right through, but shunts high frequency noise to ground. The shunt capacitors present a high impedance at powerline frequencies, but look like a short at RF. The series inductors are just the opposite, having very low impedance at 60 Hz, but effectively "choking" high frequencies from passing through. There are different types of filters made, which are each optimized for use either at a noise source or at the sensitive equipment, but generally this type of packaged filter works pretty well in either application in my experience.
If used to prevent a noisy device from junking up the powerline, it would be best to locate the filter as close as possible to the noise source, so as to reduce the length of "dirty" feeder cable which will radiate the noise like an antenna.
[This message has been edited by NJwirenut (edited 03-28-2006).]
