DHK,
bmerr here. You are correct in saying that the book of James deals primarily with practical Christian living.
James 1:18 states the simple fact that they had been begotten with the word of truth, without specific mention of baptism, as you said. There is also no specific mention of faith, repentance, or confession. Shall we conclude from their absence that they are not required for salvation?
A similar situation is found in Acts 16:34, where the jailer's entire experience of hearing, believing, repentance, and baptism are all summed up in the phrase, "...believing in God with all his house."
It's a blanket statement. It's actually called a synecdoche, a figure of speech which uses a part for the whole, or the whole for a part.
For example, if you drove up in a new car, and I said, "Hey, I like your new wheels!", you would understand that I liked the whole car, not just the wheels.
So yes, the recipients of James' letter had been begotten with the word of truth. This word of truth contained in part the command to be baptized for the remission of sins.
I'm not the one twisting the Scriptures, sir.
In Christ,
bmerr