Your answer is yes, yes, and not really. If used solely as a mulch or topdressing, UCG's will dry out and form a crusty surface that is rather impervious to water, much like peat will do. It would be better to mix them into the soil slightly, combine with some other form of mulch or use them as a compost ingredient. The Soils and Compost forum has many threads on used coffee grounds (UCG's) you can review for more info.