The leather should be damp as said before. The color should be that of a blush compared to the standard color of the leather. In order to compare the two, hold your thumb over one spot while wetting the leather with a sponge. Another big problem for those new to leather is that they will not wet it enough. This was my problem until I got some instruction from an experienced leatherworker. Basicaly you wet it quite a bit, not quite sopping, but limp. (I wet the back and front, this is personal preference). You then wait for it to dry, about 15-30 min. and start working it when it has dried to a blush (Probably a deep blush). You will need to re-wet it from time to time while working, depending on the size of your project.
I did (and still do) a lot of leatherwork in previous years, so I am more used to it than knfemaking (for those of you that know me as a newbie)
Hope this helps, I can give you more info if needed.
~Brian