Installing a reserve tank

I was looking at getting a compressor for painting parts no larger than panels. All I've got is a dinky 2 hp (max) 10 gallon unit, but my uncle is going to give me a large oxygen tank that he said I shoudl use as a reserve unit. Woudl someone care to explain how I would hook it up and what hte use would be? I'm assuming I'd just fill it up to a very high PSI (can take up to 2400 PSI) and it would act as a larger tank that is only filled to 100 PSI. I have tried seraching around but can't quite figure out what parts I'd need... here's what I've found

Tank
Compressor - preferably 2 stage, 5+ HP, 80 Gallon
25' Hose
H20 Remover
Pressure Regulator at the connection to the tool
Paint gun (only used for primering and touch up painting [flames])

Guess this one is actually 2 questions, what's the purpose of a reserve tank and how would I use it in my case. And doe smy list include all the parts? This will be a unit that will have to be put away quite often.

The compressor we have is handmade, it's an old air pump ( from a compressor ), motor and the tank is an old hot water tank. an hot water tank would hold more air and are fairly cheap. My dad made our compressor around 10-12 years ago and it hasen't blown up yet.