Tools, Sharpening and Power Machinery - Hooking up a compressor, inside or outside?

I have a 5 hp compressor in my basement. I just bought myself some new air tools. Should I leave this compressor in my basement were it is warm and run a air line to the inside of my garage, (which is attached to my home). Or, put the compressor in the garage were it is cold. If I put it in the garage, at night it would get cold, then during the day when the sun is out, the garage warms up's alittle. Would this cause alot of condensation to built up in the air tank? If I leave it in the basement, that would put warm air going into a cold air hose in the garage, that would give me condensation in the air hose, wouldn't it. Any idea's on the best place to put this compressor? :confused:

If you're content with it in the basement leave it there and install an air dryer or water trap in the garage. I think it would add some yrs to the compressors life being in a constant temp environment.
Mike

I found a neat little addition to my compressor I believe from Harbor Freight Tools. It is a moisture purger that works automatically every time a load is placed on the hose. You attach it to the drain, and run a line in "T" to the pitot tube from the switch. Every time the compressor turns off, you hear a "psss" sound, sort of like a third air tank on a tractor trailer. This keeps moisture at a minimum in your tank, since it operates with each cycle. I would install one of these in addition to the dryer/filter to keep the tank lively.