Just installed my Bakflip and cut about a 5" length of tube and installed using #1 on each side. It appears that #1 accesses the bed stake holder area plus a drain hole is in the bottom of the stake holder. I figured this would probably empty into the same area as #2 which I had originally intended to use. #1 was quite a bit easier with less tubing exposed. Also used a couple of tie wraps to secure the hose on the nipple.
BTW, I had to supplement some water intrusion around the tailgate with some small bits of the long strip of weatherstripping included plus I used a couple 6" lengths cut from the plastic bed liner type of material included to cover the stake bed access openings by the tailgate since the OEM bed rail liners on my truck have bed stake openings exposed in the rear. Has anyone else had any water intrusion with their Bakflip?