GUNNER,
Not a bother at all. I'm glad that you are forging ahead with your project.
To answer your question, I usually use the paper dry.
Sometimes, when I am finishing the blades and back springs, I will use it wet. Whether I choose wet or dry depends on the consistency I am seeing in the finish. Less consistent finish usually will become more consistent when I move from dry to wet.
The older the paper gets, the more 'broken in' it is, the more consistent it gets when using it dry.
To complicate matters, different brands of paper also give different levels of finish.
The beauty of what you are going to do to your knives is that anything you don't like can be easily remedied.
One more thing. When finishing the blades and back springs the best approach is to go slowly and to be very careful to maintain straight line movements with your paper/sanding block.
Some guys will only go in one direction, lift, and start again.
I used to do this but have a pretty good handle on keeping things straight when going back and forth.
Now, let's see some photos of those old Schrades coming to life and keep those questions coming.