I would use the whole bag and pull out maybe 12 briquettes and light those. Once they are lit you put those on top of the unlit in the ring. I usually put them all in the center. Some people but in a tin can open at both ends, put the lit in that and then pull out the can. Once you are done cooking just shut down all your vents. You'll usually wind up with some reusable charcoal.
That lid mod is pointless really. It would make cleanup a little easier because then you can just foil that lid instead of the whole pan. You can't really use the lid with water, although some of the reviews say that people do. That make no sense to me. The point of the water is to create humidity. I actually ordered one and instead of getting the lid, I got a box filled with plastic bags. That soured me on the whole deal and I just got my money back. Also, as others have pointed out, there is no way that's anything but a pizza pan you could probably get for way cheaper.
lol on the lid. My understanding about the water is that it acts as more of a heat shield, and keeps the heat at bay. I will probably just foil the water bowl it would be cool if they made a disposable tray that just fit inside of it.
I will probably dump the whole bag in like you say and heat a handful of coals and see what happens. going to try to make some Beef Ribs first I think.