Absolutely soak the stone prior to lapping. As far as silicon carbide vs. wet or dry paper, they're the same. The wet or dry sandpapers typically are silicon carbide. The brand usually indicates the quality, though. 3M and Norton papers (not familiar with the McGuire's, Randy) typically have a better resin bond than the cheapie papers. Translation: you get less grit contamination off the good, quality papers than the generic brands. And usually the price difference isn't that much.