How to prepare Spanish Migas?
Regarding your questions:


  1) How can the bread be cut with the least amount of crumbles?


Traditionally migas de pastor (shepherd's migas) were the result of rubbing a piece or very dry bread with a couple of rough hands. If you don't rough hands, another way is rubbing 2 halves (lengthways) of a bread stick. This way the migas are all crumbs, but those are traditional migas.  

If you want to chop the bread and have dices of bread to fry: Traditional recipes call for dicing bread the day before you cook migas. I advise you to dice the bread (size of normal dice would be fine, bigger would be ok too) when the bread is still soft. Because, if bread is too dry can be even a bit dangerous to chop...


  (does it depend on the bread type, the time the bread has gone stale, should the bread be fresh or completely dry, etc)


Type of bread: Tradicional recipes call for breads such as chiabatta / candeal. These breads have a strong crust. Nowadays, breads like baguette or, if you're living in Spain, the common "pistolas" are ok too (and easier to chop / dice too).

Time for bread going stale: it depends of the real quality of bread and your living location. Meaning: the more artisan the bread is, the longer time time would need to go stale. A common bread is normally not so good, so it really depends where you live. Regarding your location: If you live close to the sea, bread would go even softer, like chewing gum, don't expect like stone-stale bread. If you live in a drier environment, it will get dry and stale in a couple of days. I would wait much time, because believe me it is really difficult to chop and dice when bread gets very dry.

Therefore, experience is the key for every migas cook! I know it's not very exact, but that's the way it is... 

About purchasing the bread fresh or not: In Spain, in places where migas are a very common dish, you can find diced migas ready to fry in a normal supermarket. Outside these regions, you would only find normal "fresh" bread.


  
  How can you fry the bread in such a way that the outside is fried and the inside is moist? (is there an amount of water that can be measured, how hot should the pan be, which pan should be used, how much oil should be used)
  


Water and oil needed: Any spanish granny would say that there is no measure for this... crazy, huh? I found some recipes which call for 1 glass of water (250 ml) per half bread stick. Some recipes say to wait 12 hours to moisture bread, some others don't... Oil: this is really your choice. I advise to cover the base of a frying pan with olive oil and some garlic cloves, when it is hot, add the diced bread and cover bread with oil. If you see oil hasn't moisture all the bread in the pan, add some more, little by little. Greasy migas are not so good...


  About the pan: it is better to use a pan like this, not so deep not so flat either.


Oh, and you didn't say anything about chorizo or panceta (fresh bacon). Without them migas are not real ;) Fried them before adding to the migas.

Hope this helps!!