In the video of the CSX B36-7 the air dryer is the cylindrical appurtenance seen between the fuel tank and the forward truck. It is a mechanism with twin 'towers' filled with a moisture adsorbent called desiccant. Normally one tower is in service with air flow from the air compressor to the air reservoirs. The other tower is will be in "purge" with a small amount of dry air flow purging the moisture. Depending on design either a timer or a moisture sensor swaps the towers.
These are two of the more popular makes of locomotive air dryers:
http://techinfo.wabtec.com/DataFiles/O& ... 21,S.3.pdf
http://www.grahamwhite.com/main/product ... 1=43&P2=-1
The 'spitting' sounds are separate valves on the air reservoirs. At a low point on the reservoirs are the spitter valves which periodically blow down any accumulated moisture.