Hydraulic Brakes

I don't have hydraulic brakes but at some point will get some. As such I wanted to understand how hydraulic brakes work so drew up a diagram which some may find useful;

On applying the brake lever the piston is pushed past the expansion tank hole and thus hydraulic pressure is applied to the brake pads. The pads have a greater area than the piston so the force is greater (force being pressure times area) but the distance moved is very small.
To put fresh fluid into the system the bleed nipple is opened at the bottom of the system and more fluid poured into the expansion tank. The fresh fluid is pumped into the system by applying the brake lever repeatedly. Bubbles in the system are also removed in the same manner by expelling them through the bleed nipple via adding fresh fluid to the expansion tank and pumping it through.
One thing I haven't quite figured is how do the pads self adjust to account for wear or does one adjust them over time like with V brakes?

On applying the brake lever the piston is pushed past the expansion tank hole and thus hydraulic pressure is applied to the brake pads. The pads have a greater area than the piston so the force is greater (force being pressure times area) but the distance moved is very small.
To put fresh fluid into the system the bleed nipple is opened at the bottom of the system and more fluid poured into the expansion tank. The fresh fluid is pumped into the system by applying the brake lever repeatedly. Bubbles in the system are also removed in the same manner by expelling them through the bleed nipple via adding fresh fluid to the expansion tank and pumping it through.
One thing I haven't quite figured is how do the pads self adjust to account for wear or does one adjust them over time like with V brakes?
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you concept of bleeding the brakes is the most simplistic posible.
have a read of each makers manuals or the info on park tools.
Parktools :?:SheldonBrown
also, i've been told that if you press your brakes while the caliper isn't on the disk (for cleaning/removal etc etc) the caliper will close and be difficult to open again.is this because of the adjusters? any way of rectifying it if it happens?
Ben
Similarly the diagram explains why turning turning the bike upside down maybe a poor idea as air can get into the system - does this mean that if repair a tyre puncture I shouldn't turn the bike upside down as I do with my V brake bike?
Details of bleeding is given here;
http://www.parktool.com/repair/readhowto.asp?id=126
Parktools :?:SheldonBrown
Also the self adjustment happens because as you let the lever back out, the spring returns the lever. The "suction" in the brake pipe pulls the pads back but only until it clears the opening to the resevoir. At that point it sucks in an amount of new fluid exactly in proportion to the amount of pad you've just worn. So every single application of the brakes it readjusts the tiny amount necessary which is why everything else being equal, your bite point never moves.
But the only way I can see that the wearing surface of the pads would keep the same distance apart is if instead of them being attached to a fixed spring they were instead on some sort of spring attached by friction.
Here I shown the pad springs as not embedded in the pads but simply pushing on them - thus as the pads wear they will slip along the endballs of the spring... however my solution doesn't seem a very smooth way of keeping the wearing surface of the pads a fixed distance apart;
The mechanism for taking up wear is as I described previously.