First off. I only use live sand. I have done 2 ways. I turn pjmps off to start in both methods. First method.
1. Put live sand in 5 gallon bucket. Add water from display and stir sand and get cloudy milk out of it and the preservation block thingy. Drain excess water and repeat several times to acquired rinse level. Once complet scope sand and put in aquarium. Thus is preferred method for less mess in aquarium.
Method 2
2. Cut bag open and fish out that preservation thingy. Scope sand directly out of bag and place in aquarium. You can actually put bag on there if you have spot or room. This will cause a HUGE cloud storm in aquarium and put white dust all over everything and make water foaming at surface. You will want to have filter socks in sump for this one. You will need to just let skimmer cup overflow in sump drain for a bit. It will go crazy. I just let skimmer hose to a bucket and let it do its thing. Once you are able to see in aquarium again. The whole rock work will need to be dusted off with a pump etc to get white dust off. Be sure to get the corals clean. This will take several tries.
Anyway. Both methods work with no ill effects that I have ever experienced, but option 1 is far better choice. Just more upfront work.