*** "So I buys a pound of this stuff... stuff it into some type of canister and wet it with distilled h2o? Thats it? And it maintains the perfect humidity?" ***
Yes. Like arwings said, don't add too much. Just enough to moisten them without excess water. If your humidity then runs too high (too much water), just run a hair dryer over the beads for a bit and try again.
For that size of humi, you won't need too much. Remember 1#/5 cubic feet.
1. Take 3 inside measurements of the humi in inches.
2. Divide each one by 12.
3. Multiply the 3 for cubic feet. Probably a little less than 1 so 1/5 of the pound (example)