I use laterite as a substrate, simply because i couldnt find or get flourite or eco complete, but laterite is fine.
If your useing it in a newly planted tank you put it in as the first layer and then put your gravel in on top of it.
If your tank is a planted tank allready you just mix it with the existing gravel.
As Nospherith has said allready the gravel you mix it with should be quite fine, ordinary gravel would be to big, so try and find something about the same size as the laterite.
Laterite will eventually get mixed in with your gravel as you put plants in and change things around etc and this is not a problem even for a new setup so dont worry to much about having to have it as your first layer, as enevitably it will get mixed up.
When you buy it just rinse it a few times but not to much, as you are just washing away the benificial minerals it contains, but you will be tempted to keep on washing it, as it will produce a deep red colouration in the water you wash it in, and you will think it is not clean, so DO NOT OVER RINSE IT.
When you put it in you tank and cover it with the other gravel your water will cloud up badly no matter how careful you are adding the water, this is harmless to fish and the plants, and will take a few days to settle and probably leave a scum on the surface of the water, just remove the scum with kitchen towel etc you will probably have to clean the inside of your glass afterwards also.
For the first few water changes you do, or if you are moving plants around you will probably unsettle the dust again and your tank will be a bit cloudy, but once it settles after a few weeks this isnt really an issue unless you do some major aquascaping.
But it working fine for me, my plants are rooting nicely.
