The mystery substance is glue or jewelers cement. You have to measure out where you want the beads then apply a dab of glue in the hole of the bead. I don't use this method because I get glue everywhere.
You can use a folded crimp with a bead cover.
My personal favorite is the old fashoined surgeons knot on either side of the bead.
As far as monofilament, I like Fireline.I can buy it in the local Sporting goods section of Wally World (Which is important, I live an hour away from any LBS. ) and it takes more abuse.
Check this site it will give more info on the product.
http://www.fishusa.com/tackleshop/catalog_product.asp?ProductFamilyID=%7BF507A6C2%2DCF58%2D4A3A%2D9FFF%2DB9F85393BD75%7D&i=E66E6F0C595743ECB98A72061E3BAD61