I've tried the rehydrating thing a couple times on the recommendation of Jamil and others, but to me, the risk of contamination is just too high, and the steps too difficult for me to bother with anymore. In order to "properly" rehydrate the yeast, you must:
1) boil some water
2) cool it down to around 90 degrees
3) pour yeast in and stir
4) then, you must add a wee bit of wort at a time, in order to slowly drop the temp of the yeast solution. This must be done carefully and slowly, so as not to shock the yeast
5) pitch
Now, to me it's no. 4 that makes it too much trouble. Both times I tried this, it took so long to drop the temp I thought it too risky for infection sitting open the whole time. Plus, dry packets contain alot more cells than their liquid counterparts. Not to mention, Fermentis even tells you on their website that alternatively, you can sprinkle the yeast on top of the wort and shake it in.
Anecdotally, in my experience, I've achieved better results just dumping it in. Of course, the superior results can likely be attributed to me doing a better job of brewing those particular batches.
Anyway, my advice is to skip the rehydration bit and dump it in.