(I'm just a diyer):
I'd use 3/8 x 1/4 v-notch. The idea is to set the tile into ridges. When you push and squeeze, the ridges flatten out, filling the voids, and pushing air out. It creates a small suction, and allows the tile to be (relatively) evenly pushed in. A solid coat of tset would be hard to set in, because the excess would have to travel all the way to the sides of the tile. This would make it hard to compress the tile flatly.