I'm diluting it with water 1:2. No particular reason, just a starting point that worked.
Katharine pointed out that there are two different types: PVA glue and PVA size. Did you use the glue or size when you tried it before? I'm using the size. I have to give credit to Jim Larimer over at Hybridphoto.com for turning me on to this stuff. He uses it full strength though.