In a compact design conventional system the hot water line runs as a main line (no holding tank, unlike a central manifold distribution system) from the hot water heater then branches to the fixtures.  Typically the branches are short and the main hot water line is long; however, this system, if not designed well it can lead to long waits for hot water the further the fixture is from the hot water heater, and a lot of wasted cold water flows down the drain as the user waits for the hot water -- a common problem in brownstones where water has to travel vertically several floors from a single heater in the basement.