Actually CaliAnn they are neither! Neocolor II are water-soluble wax crayons. I would say that they feel like a mix of Crayola crayons and oil pastel to use. They are also more opaque than either watercolours or coloured pencils, a bit like gouache. Also, there are Neocolor I that are the water resistant equivalent to Neocolor II that I also use when I want a part of the drawing to stay put when I add water.
At first, I usually work with them just like I would with Crayola crayons but, after, I go over them with a brush and water. After that, I make more and more passes, mixing colours into one another, some I wet again and the few last ones I usually do dry, by applying more and more pressure, until I get the wax shine and saturated colour that I love
In my opinion, its just the best feeling to work with these crayons!
Here is a picture of a few of the set that I leave at work to draw during my lunch hours.
And here is a small and fast demo of my process that I just did with 3 crayons (because its Friday afternoon and I just cant concentrate at work anymore :P )