That chemical affects only a small percentage of the fish in the tank where it's used, so it's best to use it when your tank is full to increase the chances of seeing something happen. It works immediately, so any effect will be observable right away.
I don't want to put a spoiler here, since there have been several discussions about it already. If you search for "unknown chemical" in the forums, you'll find threads that discuss what it does and how people have used it to their advantage.
