Alan,
Up to you really...based upon the Flow Direction and System Type of the Connectors on the System, you could set up a System however you want.
The limitation here is what can be defined as a "Child" of the System and what can be defined as the "System Equipment".
For a Supply System, the Flow Direction needs to be "In" for all "children", and System Equipment has a Flow Direction of "Out". The opposite applies to Return systems.
Generally I have seen it relative to the Terminal, but it doesn't have to be that way. We designed the framework to be open in this way.
Cheers,
Kyle B
Revit MEP Product Manager
Kyle Bernhardt
Director
Building Design Strategy
Autodesk, Inc.