I guess this is somewhat of a necro-thread, but thought I'd add some info I gleaned.
At a concentration of 5%, it only lasts about 1.5 hours. http://www.deetonline.org/faq.php#q9 At 100%, it lasts about 10 hours. To me, it's a huge advantage to be able to apply it once and then not have to worry about it again. No way do I want to stop every 1.5 hours to reapply it. So if you feel the way I do, the technique is to put a tiny amount of 100% deet on the back of your hands, and apply it to your exposed skin.
If all you care about is minimizing pack weight, then you actually get more protection per unit pack weight when it's diluted. The ideal thing would be to carry the 100% stuff and dilute it with water, which you don't have to carry from trailhead to trailhead. DEET is not very soluble in water, but that's OK, because you don't have to actually form a solution. The basic technique is to squeeze out a tiny amount into a baggie, then add some water, and mix it up enough so that it forms an emulsion. The mixture will stay emulsified long enough to allow you to apply it. Some people do the mixing in the palm of their hand, but then you tend to get it in your food. You can apply it with the back of your hand, or you can use a baggie as an appicator.
100% DEET will not eat nylon, silnylon, or polyethylene. It will eat polystyrene, ABS resin, styrofoam, most synthetic fabrics, and polycarbonate. So the things to worry about are generally bear canisters, your car's steering wheel, and possibly your clothes. You typically don't have to worry about it eating your backpack, sleeping bag, or tarp.
DEET works simply because mosquitoes dislike the smell: http://entomology.ucdavis.edu/news/DEETresearch.html , Zainulabeuddin Syed and Walter S. Leal, "Mosquitoes smell and avoid the insect repellent DEET," PNAS.org. Older statements about blocking their sense of smell, etc., are incorrect.