If it's a new tank I normally put the sand in, fill with water, slosh the sand around and empty the water out, then refill, repeat, refill, repeat. I have a pipe attached to my tap which sucks the water out and it's awesomely easy to do it that way. I wash gravel the same way. When the water is just about clear I just let it settle whatever is still there.
That is a pretty good idea.
I wanted to eliminate the time the fish were in the temp tank. That why i did it the way i did.
Just keep in mind that this stuff is really hard to rinse.
The pillow thing sounds real good.