Skim coating drywall is an important extra step that can minimize the amount of sanding that needs to be done. It can also help to produce a nicer finish for painting.
As the name implies, skim coating drywall involves a very thin coat of mud. Unlike other coats, where mud needed to be built up, skim coating only fills voids. The idea is to create a perfectly flat surface.
Mix the mud thinner for skim coating. Use a wide knife, like a 10" or 12". Coat the entire area of the seam or patch with mud. Then with a dry knife, drag the area tight with the knife. Very little mud will be left, only what is needed to fill voids and hollow spots. A skim coat will dry very quickly, since there is little build up.
A properly done skim coat will leave you with very little sanding. This is a good trade off for the extra work.