also, whatever pots you use for the wax will be almost impossible to clean, so get some dedicated ones from a thrift store. I basically do the same as Perry, but I use way more water, like 4", for the initial melt. Also I just let the whole thing cool in the original pot after the first melt, so I have one less thing to clean.
Keeping the wax separate really depends on your intended use. If you're after cosmetics grade, then you really want just cappings. It you're using it for painting plastic frames or making furniture polish, then it really doesn't matter that much. Any really dark wax, just toss, it's not worth the trouble and likely full of pesticides anyway.