Methinks some salesman is sellin' ya some bull. One ring, maybe two if the floor is is rough, but the only 'setting compound' I use is settin. my fat arse on the stool, and wigglin' till it touches down.If you use a wax ring do you need toilet bowl setting compound?
I just read about it in some online how-to articles. It sounds like something that was used prior to wax rings.
Why not caulk the toilet to the floor? As AllanJ said, shouldn't it be caulked all the way around to protect water from getting in?