Go to the Container Gardening Forum and find the posting labeled "Container soils and water in containers" here you find links to 8 associated threads by the same author with 150 postings each. It will answer all your questions.

Container soils and water in containers

I use the mini fir bark that is available in bags for mulching. It is not composted and you have to water a lot at first until those bits get and hold their water. I add about 20% of organic compost, but I'm sure that that decomposes in the pots by the second or third year. I'm in an area that doesn't freeze, so I'm offering this advice to let you know that the bark you put a hosta in doesn't need to be composted first. It won't kill the plant. What you are looking for is really good drainage.

-Babka

Does this work when planting into the ground, to put in some mulch below the hosta? I understand that it will settle over time, but if it's mounded up, maybe that would work okay.