Ern said:Mud, spackel or whatever you want to call it. Use it to fill in the joints and over the screws to make the wall nice and smooth. Ya it was pretty friggin cheap to do. I was surprised. Yes you can paint it but you need to wait until the Mud, spackel or whatever you want to call it has dried and been sanded down and the walls have been whiped down.
To add, when painting fresh drywall, it must be primed first. Then, if you are wanting a smooth finish, id suggest a light sanding after the primer has cured. Then apply finish coat. Preferably 2 light coats opposed to 1 thick heavy coat. Do all that and use a decent paint and you'll have a nice finish.