Question about knife sharpening?

Ok, first off...I use a diamond stone to sharpen knives. The diamond stone I use has 2 sides to it, one for polishing and one for grinding. When I sharpen a dull knife I usually push the knife back and forth in an up and down motion (to level the edge of it). Now my question, is that a good thing to do to create an even edge? Also, since I use diamond stones should I use it dry then wash it? Or would I get better results using water with it while I sharpen? Any good techniques to get a deep even edge? Also, the term bevel refers to an edge. Right? Anyways, anyone that has experience with knife sharpening would help me a great deal.