Kevin, I'll be a little more specific, and since you've done a bit of drywall work you probably already know this, but I've already gotten a couple of emails from readers asking what "setting compound" is. So...there are essentially two families of drywall compound. Premixed mud in the infamous drywall bucket that hardens by drying, and "setting compound" that hardens via a chemical reaction. Premixed mud is water soluble. If that's what you have on your cement board, I'd take a sponge to wet and soften it and a bristle brush or taping knife and get rid of it. If what you have is not water soluble (it doesn't soften when wet) then it's a setting compound. Setting compounds come as dry powder, you add water to them. Add water, mix, and the chemical hydration reaction starts. Some are designated by a certain amount of working time, like "20-minute mud". You have about 20 minutes to get it on the wall before it gets to tough to work with. It's also referred to as "hot mud", I always figured that's because the chemical reaction gives off heat after it's mixed with water. So...if it's water soluble, get it off your cement board. If you tile over water soluble compound, the moisture in your thinset can be absorbed by the compound, which can soften the compound and destroy the bond between the tile/thinset and the wall. If it's a rock-solid, non-water soluble setting compound, I'd say it's okay to tile over. Mongo

Thanks, Bill... How about the rest of the non-wet-area walls.. can I just thinset/tile right over all that new, raw sheetrock & mud - or should I prime it first?

They are the same, but come in a number of different grades. Base compound is heavier than topping compound. It is actually pretty rare to need to add water if you mix up the container thoroughly before using it . Setting type compounds come as a powder in around 20 pound bags and must be mixed thoroughly and smoothly with water before use. They harden by chemical reaction (as opposed to drying like the pre-mix stuff) and if mixed correctly have far less shrinkage as they set. The far lower shrinkage is enough to make Easysand worth using for screw dimples, let alone seams. If you are inexperienced buy a longer setting time. Easysand20 is for experienced folks.

If you still have the wood lathe to fill the hole and just need plaster, you can use plaster of paris (most like your old plaster), or something like versabond drywall compound to fill the areas. The old plaster is probably fairly thick, so you could also screw or glue in some 1/4" or 1/2" drywall first to fill the void, and then use plaster or drywall compound on top of it to completely fill in the area. Plaster of paris will dry very hard, so gradually layer it in to minimize the need for sanding. This is one case where a little is better than a lot, because you can always add more layers. You can use drywall tape on the edges where it meets the old plaster, but may want to score the old plaster so that you can embed the tape a little. Plaster of paris also has a very short working time (about 10 minutes), so don't mix up too much at a time. Drywall compound will probably match almost as well as plaster of paris, and its available in mixes that are easier to work with (20 minute set time, several hour set time, etc.). Bruce