DE can be used for a lot of things - you can even use it inside your house if you have a problem with ants or other critters! For example you could sprinkle it ounder your fridge or behind the pantry.
The slurry method is an excellent way of applying it in the coop because it goes just where you want it and makes it easy to manage. You can also put some in the chickens' dust-bathing spots if you like, as it may help to keep the lice and other mites off them.
Another way many people use it is to put a little in with the chickens' food to help keep intestinal worms at bay. I tried this and my chickens still got worms, so I certainly don't recommend it as a substitute for chemical worming.
As for the garlic, some people put a whole clove in the water, some use garlic flakes, and some use crushed garlic. I add crushed garlic to the chickens' food as I find this an easier way to use it than putting it in the water.