What was meant by "half corn sugar, half extract" was that you still use the entire contents of the kit but instead of adding 1kg of sugar, add .5kg sugar and .5 kg of Dry malt extract (DME), wich can be bought seaprately. This will give more body to the brew.
And, I usually add water to get to about, 1.044s.g. I just leave my sterilized hydrometer in the primary while adding water and stop when I get to the desired gravity. Then take the hd. out, pitch the yeast (if temp is between 20-30C) and let nature take over.