Venting outside is fine but, for me, in a basement shop, it presented some issues. It was much easier to buy a dust collector that already contained HEPA filtration. The key is, though, whether you vent outside or with a filter inside, you need to prevent the air exhausting from the collector from getting back into the shop or your house. Greg M is right, though, it is very important. I did a lot of research on collectors over the past year to replace an old Oneida collector. The bottom line is that very few of the companies making collectors provide adequate HEPA filtration. Oneida does and they have been in the dust collection business for about 20 years. They are very innovative, provide very good support, and have top of the line filters. It may cost a little more but, whatever you do, the level of filtration of the air and the air movement of the collector for your use are, to me, the two most important issues. If it's sized right and has HEPA filtration, it will do a great job and your shop environment (and possibly home environment) will be safer. Most important, you will not be putting yourself and/or family in jeopardy.