I have to stuff a little extra of the tube in the zippered part, otherwise its too long and hits my leg. Over the strap I put it in the clip so it is pointing down. My father in law somehow manages to loop his back up through the clip so its pointing up. I tried this, but mine won't stay. Mine is really old (~'99 vintage) so maybe they re-designed the clips??? But it sounds like you got it working anyhow. I love the camel back for long rides, and I think its easier to drink out of while riding than reaching for the bottle.
The best part about going up hills is riding back down!