Just raw plasterboard, the paper finish? This
must be sealed properly, usually with a thin coat of plaster. If you're not doing that then take advice from the manufacturer about the best product or use a dry wall sealant such as recommended in
this article.
Once you've sealed the plasterboard then I can't seen any reason why you shouldn't use your emulsion as an undercoat, or just as a first coat. If it's a water based paint then yes, thin with water. Check first though - if you've ever added water to an oil based paint you'll know why!! You may find instructions on the tin about thinning for a first coat, or look it up on line at Dulux. Also make sure that your undercoat and top coats are compatible ie both water based or both oil based. Have fun :)