It doesn't crust. And people use it in all sorts of ways. But yes it can be used to ice the outside of the cake. My limited experience with it, is that i use it to make fruit mousse type fillings that are shelf stable. I either just mix jam in to the whipped icing or mix the sleeve fillings in.
It doesn't crust as much as it "films." It's not something you can smooth with a Viva. To me, the texture and taste are identical to Cool Whip. It just doesn't have to be refrigerated, which is why people like to use it for fillings. I have used it for fillings and I iced a cake with it once. I definitely didn't prefer that over a regular buttercream. It all depends on what you like.
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