I have always used oil-based wood stains and finishes. This is fine in summer when the temperatures are just right but try it in an 8 degree garage and bad things happen. I tried to make a spraying station in my bathroom but was unable to contain the fumes in the improvised "booth". Therefore, I thought I would investigate water-based products.
The "green" regulations have had the beneficial (?) effect of more research going into water-based paints in general so there is now more choice than there was even a few years ago.
I really wanted to know a) How good are water-based stains and b) How good are water-based finishes when applied over oil-based stains.
I tried a water-based Varathane stain, new on the market. It was a disaster. The stain would not penetrate the wood and was easily removed by even light sanding. Varathane water-based finish over it sloughed off quite easily. I returned to my favourite Varathane gel stain. I let it dry for 48 hours and then applied Varathane Diamond water-based finish to half the pieces and the Varathane Professional Clear finish to the other half. Both produced acceptable results. A tape test showed good adhesion of both. The water-based finish is not as lustrous and rich but the difference is apparent mainly when viewing the pieces side-by side (see picture).
Given how well the gel stain behaves particularly on the end-grain it will be while before I am persuaded to try water-based stain again. I hear good things about water-based stains produced by a Quebec company called Saman. We shall see!
I was happy that water-based finish can be safely used over an oil-based stain. However, in the process of doing the trial I developed a method whereby I can use the oil-based finish inside the house without contaminating the atmosphere beyond what is acceptable: Keep everything warm until the last moment, then dash out into the garage, spray and dash back in with all the pieces and cans!