I need some type of grouting material for a patio made with small concrete slabs. Would this be good to use? I recently saw an application of some type of sand that was used between pavers that was then sprayed with water to set it.

You didn't see what you thought you saw...

They swept sand in there all right... then vibrated or tamped it... the water was to help it settle in and compact.

Any hard grouting in a situation would crumble and break just during the wet and dry periods in summer, much less when the ground heaves when it freezes in winter.

I set sand down on level ground, all grass removed, then I set my slate in, or my patio stones, or my bricks, leveling out as I go so it will be even. Then I spread more sand over the completed work, spray with a hose until it settles, next day do the same thing until stones or whatever is used is, so to speak, terra firma, and if seeing as I am a female and doing this myself, then you lady in can do it too!

It is sand you need from a garden center, they will direct you. Nothing that cements between in any way can be used for this Application, because the stones, slabs, slate whatever have to move or they crack.