>>I deffinately dig it, though you may want to bring the water bowl up a bit above the sand's level surface. My gecko walks through his water constantly, so you may get a fair amount of sand in yours.
It varies. Sometimes I don't bury it down as much. I've only noticed once or twice where she got sand in the water and it was because she was digging near it and threw sand back into it. I take it out every couple of days anyway and wash it out.
I'm actually planning to get a couple more leos and switching them out of this 20gal and into a 29gal. I want to set it up like the colony tank mentioned in "The Herpetoculture of Leopard Geckos" for those of you that have read it. If you haven't read it, do.
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0.10.0 Ball Pythons
0.1.0 Leopard Geckos
0.0.1 Egyptian Tortoise