looks like the link afilter sent you is very helpful. There are a variety of ways to do a refugium from HOB
designs, to sump designs, really your imagination is the only limit. A friend of mine designed an above tank refuge that works well. The main thing you want to remember is this is going to serve a two fold process. It is going to eat up nitrates maker your overall water quality better, and its going to harvest co and amphi pods
for your manadrin and other fish.
That said you dont want it to be pretty. Lots of algae, even hair algae and others should be desired. Macro Algae can be added, but the more the better both in the eating up nitrate category and in the copod category since copods love having algae to live, feed, and breed in. One thing you may want to consider also is feeding your refuge, Photo and Zoo plankton as well as live brine shrimp work great for this. I accomplish excessive algae growth by using a 40 flood light that runs 24 hours a day over my refuge.
Live rock rubble, live sand, and Miracle Mud all make great substrates and there is a little of each in my refuge. As for keeping a Mandarin in a tank without a refuge. In my personal opinion it doesnt matter if you have a 500 gallon aquarium, if you want to keep a Mandarin you should have a refuge.