Drain by removing the lower radiator hose (and the lower hose on the engine if you want to be sure you got it all out). reattach the hoses once it's drained
Filling with water is an optional step, some people do use water. Some people put the radiator flush in with the old coolant and run it for 50 miles to circulate which is probably the more convenient option. You can also back-flush the heatercore and the radiator (put water in there using a hose the opposite way that it usually flows to clear out gunk)
Refilling with antifreeze is usually undiluted, follow directions on the bottle you buy. You can't mix coolant types, but if you've flushed out all of the old stuff you can put any type in. They do also sell some that you can use with either type. Park on a hill with the front of the car facing higher, remove the expansion tank lid and let it run until the fan comes on and goes off 3 times to burp the air out. You can rev it a little bit to get it warm quicker but if you rev it too much it'll bubble out everywhere. A few days later after you've driven it some, do the same again just to be sure all the air is out.
