I'm not sure if it's better to use fw RO/DI to dip than tank water, I've just gone that route the last few times I've dipped. The bottle says you can use tank water and considering how strong the Lugol's solution is, I doubt using fw makes much difference.
Yes, it's important for the dipping water to be the same temp as your tank. When I've used fw, I microwave a portion of it to get the temp right.
The bottle says to dip for 10 - 15 minutes, stirring / swirling often. I've recently dipped 6 colonies of zoas for 10 - 12 minutes with no adverse effects to the colonies. Most have opened up within a few hours of the dip, but I did have one colony that stayed closed until the next day.