I always talc. I pre-talc my spare tubes and wrap them in saran wrap. It really eases installation and removal of the tire and tube, and also helps keep the tube from getting pinched under the tire bead on installation. Talc on the bead of the tire also helps. I don't think it does anything other or more than help with installation and removal.

To patch on the road, (I use self adhesive patches temporarily) simply wipe the talc off with a finger wet with water, spit or sweat. Wiping firmly on your jersey, shorts, top of your sock, back of your glove, etc. works too.