Right, there are multiple variations but they generally work in skilled hands although I learned from plumbers who always used oil (although using oil was always an imperative with gas pipes). Using oil usually negates the initial leaking whilst waiting for the hemp to dampen and swell.

Edit: I agree that using oil is counterproductive with water pipes—initially at least. I was taught by both plumbers and my father (who wasn't a plumber but a mechanical engineer who worked on power station boilers) that using oil is better in the long run as it prevents the hemp from rotting and thus premature failure of the seal. Moreover, using one oil-based method means that a plumber cannot get confused and leave oil off gas connections where it's essential.

(I'd add that when referring to oil I'm specifically referring to linseed oil (even though I've seen some plumbers inappropriately use engine oil) because it slowly polymerizes and hardens even in the absence of air. This adds to the seal's effectiveness and further protects the hemp.)