Yes, evaporated milk can be reconstituted to regular milk consistency. The correct ratio is 1 part evaporated milk to 1 part water (ref. one manufacturer's FAQs) (e.g., if the recipe calls for 1 cup milk, use 1/2 cup evaporated milk and 1/2 cup water).
I've frequently used evaporated milk in both savory and sweet recipes, both diluted and not. (Indeed, diluting a bit less than 1:1 can provide a creamier consistency without needing actual cream. Whether that's desired depends heavily on the recipe, though.)
Evaporated milk is only slightly sweeter than regular milk,* although it isn't heated for a long period of time. After pasteurization (a very brief heating process), the milk is reduced using vacuum evaporation (exposing a liquid to a pressure lower than atmospheric pressure to reduce its boiling point), and "as a result, the milk is concentrated to 30-40% solids ... [and] has little or no cooked flavor" (ref). Usually, the other flavors or seasoning in a recipe are more than enough to overwhelm the difference in taste between diluted evaporated milk and fresh milk.
* Note that this does not hold true for sweetened condensed milk, which has extra sugar added. Don't expect similar results if you dilute sweetened condensed milk.