Are you adding live rock as you remove the media?
If not, then you may throw your tank "out of balance" temporarily, dont worry though, doing it a little at a time is smart and gives the other denitrifying bacteria a chance to catch up. I dont see any benefit of putting the media in the sand bed or anywhere else for that matter.
Carbon use is controversial with some saying it helps and others saying it doesnt. It really depends on your tank, inhabitants, and setup.
I am doing the same as you and gradually removing biomedia as I add live rock.
Keep a close eye on your nitrogen tests (ammonia, nitrite, and nitrate) while tweaking like this.
Eventually I plan on running the fluval with only the screen, and 1 tray of carbon about 12 hours a day. The screen should be cleaned FREQUENTLY to cut down on mineralization of debris to nitrate (thus the term "nitrate factory" for these filters). I wont get my fluval that empty until I have at or over 1lb of live rock for gallon of water.
Also beware of a beginners mistake I made. There is so much bad imformation about this hobby its nuts. A guy in a discussion board said to look for "smelly" live rock. This is a terrible joke, putrid live rock is a sign of mis use during shipment and means a significant amount of life forms have died during shipment. It needs to be cured for several weeks before introduction into the display tank.
I put 10lbs in my display tank and the ammonia went way up!
This in combination with my stupidity in setting up a FS only tank with the limit of fish and no live rock contributed to a horrible ICH outbreak that nearly wipped out all of my fish.
To top it off, I did the best thing I knew to and started doing frequent water changes but didnt realize my source water contains about 2mg/l of ammonia as well as high levels of nitrate.
I couldnt have poisoned them any better than if I had wanted to kill them.... :x
