. (It does not, however, address royal icing's confectioner's-sugar-taste issue. More on that in a moment.)
Royal icing is essentially a mixture of egg white and confectioner's sugar (often with lemon juice or another flavoring added). It may include a drop or two of glycerin to make it softer. It dries hard. Its highest and best use is for decorating and gluing together the panels of a gingerbread house. It is often colored and used to decorate cookies.
To make royal icing with dried egg white, simply reconstitute the white according to the package instructions (2 tsp egg white powder with 2 Tbsp water for each egg white is the ratio of the brands we are familiar with). Make sure that the egg whites have been thoroughly reconstituted, though, before you begin making the icing. It is sometimes a challenge to get the powder to dissolve completely, and if you have dumplings of egg white powder in your royal icing, someone is going to complain. It will help if you use warm water to reconstitute the egg white, stir thoroughly, and, quite possibly, break up clumps with your fingers.
Now, on the flavor question, we are not alone in thinking that royal icing is not yummy (in general, we think anything made with huge quantities of confectioner's sugar is not yummy). You can add flavorings, such as lemon juice; lemon, almond, cherry, or vanilla extract; etc., but that can only do so much. (And unless you use the harder-to-find clear vanilla extract, regular vanilla will give your icing a slightly unappealing brown tinge.)
We use royal icing for putting together a gingerbread house, and occasionally for decorating cookies. But nearly any use beyond that involves consuming way too much confectioner's sugar, and that's where we draw the line.
You can also use meringue powder to make royal icing. Here is a Royal Icing recipe designed specifically for the use of dried egg whites.
Can I use dried egg whites to make 
Sure, and using a dried-egg product — which is, by law, pasteurized — lets you avoid that whole 