I'm not vegetarian but I'm a big fan of Yves products and I've copied many recipes with it...pasta sauce, chili, tacos etc. You should not need to add any water to it, it should be a great substitution (perhaps only slightly drier). If I'm making my pasta sauce, I saute the veggies and then add the sauce, spices and the Yves. I'm not sure exactly what your recipe is but it sounds like you could do the same thing.
Hope this helps and there should also be some great information and recipes on their website
http://www.yvesveggie.com/.
Good Luck.