Yes, there are unit heaters that can burn used motor oil. A shop across from ours built their own heater using like 16" pipe and an old old oil burner, very dirty, most likely illegal. It was never a problem heating our office/shop. There was always around 20k gallons of #2 heating oil present.

When I was a diesel tech we had a waste oil heater that heated our entire shop. We had big drain pans on wheels with a drain tube and air hose connection, it pumped the oil into the heater when you connected the air. I would love to have that sort of setup in my garage, but the DIY ones look sketchy as hell and the ones you can purchase are very pricey. But it would be a great way to heat my garage.

Had one in my shop for a short while, on a forced air furnace. The burner had an air connection to force atomization of the waste oil, and a specific nozzle. I can't really remember, but think it was fed with 50 -60 psi to spray the waste oil. Worked great when set up right.

I can't get the grey pans I posted anymore from Autozone but I was in a NAPA yesterday and saw these, should have grabbed a couple. Can never have enough good drain pans.
http://forums.pelicanparts.com/uploa...1756228435.jpg

Looks like the top one already cracked, I'll have to check the plastic used on them.