To mud drywall, start by loading the edge of your blade with about 2 inches of joint compound. Then, hold the blade at a 25 degree angle to the wall, and force the compound between the sheets of drywall. Scrape away the excess compound, apply a layer of joint tape and then apply another layer of compound. After the area is dry, use sandpaper to smooth the surface.
This Old House recommends using a 5-inch knife to mud drywall. Start mudding in one corner of the room, and work around the room in a circle until you are back at the starting point. Remember to cover not only the joints between the drywall, but also the screw holes and other blemishes in the drywall surface.
While the joint compound is still soft, unroll some joint tape from the dispenser, and position a 3-foot section of the tape over compound-filled gap between the two sheets of drywall. Press the tape into the soft joint compound. Then, apply more joint compound to the putty knife, and position it at one end of the tape. Hold it at a 25 degree angle to the wall as you pull it across the length of the tape. Repeat this step several times, until the area is reasonably smooth. Let the joint compound dry for at least one day, and then use a sanding block or sandpaper to smooth out any rough patches. If the joints are not camouflaged well, apply a second, and perhaps even a third layer of joint compound in the same manner as the first one.