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There are two different types of mud. The first is the standard stuff that hardens as it drys, i.e. the water evaporates. This is the type you buy premixed in tubs, buckets or boxes and looks like a nasty cake frosting.
The second type is a setting compound. It hardens in a chemical process, kinda like concrete. It comes in different working times from something 5 to 90 minutes. It comes as a dry powder and you mix it, again like concrete. IIRC, its meant when the room temp is so low the regular stuff won't dry correctly.
As for tape. Sheetrock says that the mesh 'paper' is made to use only with the setting type of mud. The paper is used for the regular mud.
From what I learned form first hand experience.
My next door neighbor has been 'hanging boards' for more years than he wants to think about. He has helped (IOW, he works while I learn) me do some work and here's how he showed me to do the seams. You put mud (the regular kind) all the way down the seam, place tape on top of the mud with one hand and follow with a 6" knife in the other. When you reach the end of the seam use the knife to hold the tape while you tear it. After it has dried you go back with a wide knife to cover the tape and to feather the seams.
Takes about 10 minutes to learn how to do it and about 10 months to do it well.
I've never heard of anyone wetting the tape before applying it.
When you get dry wall mud in the 5 gallon buckets you have to stir it before using. They have hand paddles and ones that go on a big half inch drill, and I do mean a big drill, as my half inch hammer drill won't even move in a bucket of mud.
I would like to add that even though this stuff is ready to use, it does make a big difference if you (at least) stir the quantity that you dump into the mud box on on your hawk. Big Difference.