My early techniques bordered on toking white powder. Building up excess dry wall compound to produce fine mounds of powder below each patch is a lesson in acquiring dry waller's lung, if there is such an affliction.
I've found the following technique useful after watching a pro do this while waiting for an appt. and quized him afterwards. Build the dry wall level up slowly. You don't ever want to end up above the surrounding surface. Wait for it to dry, then use a broad putty or dry wall knife and scrape off the chingaderas (the little blobs of mummified dry wall compound). However, he was probably a union worker, thus the leisurely work schedule.
Then repeat as needed until the patch is level. Use the sponge technique at the end of this process. The contract pros can't afford the above wait time between applications; they resort to other techniques, but that's why they're pros and we suck dry wall dust.
Sherwood