I am a journeyman drywall finisher, so I think I could be of help here. I spent most of my time working in western Washington, but also spent a few years working in eastern Washington, which has wider temperature swings. I will tell you what works for me.
I would always use 1/2" drywall in a residential application. The 5/8" drywall only really offers one significant advantage over 1/2", and that is as a fire retardant. Because commercial buildings are open to the public, there is a higher liability to the business and the builder, so code calls for 25% thicker drywall. 1/2" is lighter, cheaper, and way easier to hang, too.
A lot of people use the yellow fiberglass tape because it is so easy to apply. This is a huge mistake. I would never use fiberglass tape on my own house, or on anyone else's if it was for a permanent build. It was invented for temporary walls in mall storefronts where contractors are required to get a barrier up quickly to eliminate the sound and eyesore of a construction project. It is weak and will not hold up to any tension. It was not designed to.
The next key factor is to use lightweight mud, and not the heavy weight mud that comes in a big bucket. My favorite is Beadex Lite. It is much softer and handles stress better than the heavy mud, and sands WAY easier. Use the yellow (taping mud) box for taping, and the red (all-purpose) for your double and finish coat. You can also use the blue (topping) for double or finish coating; I just always get the all-purpose because it has some glue in it and if you are in the middle of your double coat and discover a spot that you missed while taping, you can use it to tape the wall and then continue on. Topping mud has little to no glue and you cannot tape with it. These muds come in a box, are pre-mixed but quite thick, so you empty it into a 5 gallon bucket and then thin it down gradually with water until you get the consistency you want. Use a drill and beater bar to mix it, and try to keep from banging the beater bar against the sides of the bucket or your mud will be full of little plastic strings
Someone suggested using fast-setting (hot) mud; I do not suggest this unless you really know what you are doing. Because it sets off through a chemical reaction rather than evaporation, hot mud has less shrinkage and it is more difficult to judge the proper amount to apply. The result is usually that there is too much mud on the wall, and it is next to impossible to get it flat again. In the field we actually just scrape off the lap marks because sanding is futile. Additionally, there is a certain amount of finish mud required to bury it, which means you either have way too much mud on the wall, or the hot mud burns through and you will see it clearly through the paint. Cleanup is also more labor intensive. The only real advantage it holds is that you can double and finish the project in one day. If your project is anything more than just a few sheets you will run out of time today anyway, so you are better off to use regular lite mud and wait til tomorrow for the next step.
I also suggest using tape-on corner bead instead of bang-on bead. Just another place where you have a small amount of flexibility, where bang-on bead becomes rigidly attached, and is a common place for cracking. What's more, if you accidentally crunch a corner with your wheelbarrow or whatever else might damage it (things happen!) it is a lot easier to remove a stick of tape-on bead and replace it than digging out the nails of the bang-on bead. I suggest Beadex B1W BEADED corner bead. There is another that has no bead on it...I believe it is called B1WNB, and it has to be applied PERFECTLY or it will not come out square.
Other tips...I always start the job out by pre-filling any big gaps with taping mud straight from the box, as it will give you a good, sticky fill upon which to do your tape coat. Keep an eye out for small fractures at seams, especially at the corner of the board. Cut these loose chunks out and pre-fill before taping.
After pre-filling, instinct will suggest that you start taping right away, but the next thing I always do is to fill all the screws with taping mud. While it is true that taping mud uses more water, which results in more shrinkage, the glue in the taping mud is necessary to get a good seal on the cavity. You may find tiny papers sticking up in the screw hole; simply coating it with mud will not eliminate this...we call them "hitchhikers". If it is big, you will want to tear it out with your fingers or cut it out with a razor knife and continue on. If it is small, what you do is coat it with mud, wipe the mud back off, and then heel the paper in with the end of your knife handle. Then re-coat. Oh, and when people coat their screws, often times they leave a dab of mud on them. The correct way is to coat it and then wipe all the mud off, leaving just the screwhead covered.
When hanging your drywall, you want to stagger your **** joints so that you don't have two of them next to each other, creating what is called a "railroad joint". These require a lot of work in order to get them flat.
Another thing that is critical with finishing is using the right tool. So many times inexperienced people think that they will use smaller finishing knives because the wide knife intimidates them. This is backwards thinking. Think of the **** joint as a mountain in the middle of a flat field. You can never really flatten the mountain, but you can lessen the sharpness of its slope by adding a wide ridge to each side. The wider the ridge, the less noticeable the slope. By trying to coat the sides with a 6" knife, your ridge will be half that of the one you create with a 12" knife. A craftsman with a lot of experience who knows what he is doing might be able to pull it off in a jam, but the novice will definitely benefit from the wider knife. I suggest using a 10" knife on the double coat and a 12" knife on the finish coat. If a joint is really wobbly or you need a significant amount of fill, don't hesitate to double the width to make a lesser graduation.
Drywall paper has a different texture than drywall mud, and this difference will usually show through on a lighted wall. If you want a beautiful, consistent texture from wall to wall, simply coat the clean area (called the field) with mud and wipe it back off. The end result will be a wall that has the same chalky texture throughout. Additional work, but if looks are important, then it is well worth it.
When sanding, get a sanding pole and use 120 grit paper. Ideally, 3M makes a plasticized paper (called filmback)for sanding poles that makes for a nice clean sanded finish. Don't expect to get a perfect sand job with just the pole sander. What you want is to get the main sanding done and then finish with a sanding sponge; edges of seams, edges of corner bead, any spot that was awkward to coat will likely have a ridge that needs to be shaved down some. Use a good sponge (again, 3M is the best) and avoid cheap (home brand) sponges from Home Depot or Lowe's. They are not the same. One side is usually medium grit and the other is fine grit. You want to use the fine side for finish sanding. One thing you want to avoid is digging into the other side of the wall when you sand along the inside corner (this is called the angle). To avoid this, use a hacksaw blade to cut a 45* wedge off of one end, thus making it pointed. Now you can sand right into the angle without digging into the opposite wall.
Okay, I see that I have carried on. I hope that this may have helped out. Feel free to ask for clarification. It is way easier to demonstrate in person.
Seriously though, I appreciate your advice. I just wanted to be clear on the details. That task is now back on the "To-Do" List. As a unranked DYIer, I don't want to put the effort into something that has no chance of success and ends up looking like a huge pile of poo. I'm good with a small plie of poo though.
