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To watch the mind, as far as I understand, is to simply watch the mind without judging it. But there is a method, which teaches us to note sad when we are sad, dislike when we dislike something, happy when we are happy, etc..
How is this mental labeling different to judgemental mind?
Will this indirectly train someone's mind, to become more judgemental of oneself and others?
I guess the big difference between mentally noting vs judging what you are experiencing is the degree of objectivity. Noting helps you to perceive your experiences with clarity, which should in turn allow you to gain wisdom through insight into the nature of all experiences/phenomena. For example, if you are experiencing sadness and you note, "sad" you remain impartial. In this way, you clearly observe and experience the feeling of sadness. Your field of experiential perception remains unhindered by inner conflict (reacting to the sadness, rather than just noting it) and you are able to understand the ultimate reality of your sadness. This, applied to all experiences, should also allow you to develop equanimity, one of the seven factors of enlightenment.
Conversely, if you experience sadness and mentally oppose the sadness, you fail to remain objective through your experience and hinder your ability to perceive and learn about/come to understand your experience. This obviously prevents equanimity but, perhaps more importantly, prevents one from clear comprehension of events (such as a sad state of mind) and thus prevents insight into the nature of such events.
So, the "mental-labeling" technique, as described by the Venerable Mahasi Sayadaw, is actually intended (and more likely than not) to help one become LESS judgmental to oneself and others.
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Mental labeling is the act of saying 'sad' or 'happy', when such thoughts occur, without wanting anything to be different. The last part is important, because it means we are recognizing our states for what they are, but not judging them from the perspective of generating aversion of craving.
Judging always has a little flavor of wanting or 'not wanting', or at least an opinion about something being good or bad. Labelling on the other hand is recognizing (and being with) what's there without any of the attached filters of the mind as Joseph Goldstein calls them.
Perhaps not directly related to your question, but cultivating the right state of mind does sometimes involve discerning. However, the difference is in what we discern. We only discern our own state of mind as either skillful or unskillful in dealing with what is arising in the present moment. We do not judge that which is arising however.
