Yeah, if you trust the people who own 
www.diatomaceousearth.com, it is no good wet.
"As you may have seen in some of our other articles, depending on the situation there are two primary ways to apply Diatomaceous Earth (i.e. 
Wet or Dry.) What may have been unclear, are the advantages of using a wet application method, and how it works once you apply it. If you mix DE with water, and spray it onto trees, in your garden, underneath your house, on the ceiling of your patio, DE must dry out before it will kill any bugs.
To effectively answer this question, let's start with the basics of how DE works as a pest control substance.
DE kills bugs with what we call a 
mechanical action; DE is very coarse and absorbent, which means that when insects walk through it, it scratches through and absorbs the waxy, oily coating that protects their exoskeletons. With that layer compromised, insects are not able to retain the moisture they need, and they dehydrate and die.
When you're developing a plan to combat a pest problem, you should always consider using a dry application method first.
The mechanical action we described above is only effective under dry, controlled conditions; even a lot of humidity can affect DE in its pest control work. Because of these complications that can arise out of applying DE wet, it should only be used when really needed."