What constitutes a “flirt”?
Are there degrees of flirt?
Is there a difference in a flirt, and “testing the waters” for some potential relations?
Thoughts, observations?
I’d just settle for knowing how to flirt full stop 
Well, waitresses flirt a lot, but I don’t think they’re looking for relationships, just bigger tips. Since it’s basically the same behavior but with a different goal in mind, I’m not sure if that qualifies by what you mean as “a difference”. And of course some people are just naturally flirty, I don’t think they mean anything by it, it’s just the way they are.
One of my favorite waitresses (all night diner in Los Feliz) is an incredible flirt. It doesn’t mean anything–just her way of staying alert at 02:00am and it keeps the customers entertained–but I guarantee it earns her extra tips. They put on a better show than a strip club. Not that they remove clothing or anything beyond the miniskirts and tight, zipped down to optimal clevage exposure level blouses they wear; they’re just way more entertaining than “exotic” dancers.
Stranger
According to the sign in a co-worker’s cubicle: “Flirting – Attention Without Intention”.
Seems to me that a flirt can be any commentary – verbal, physical, etc. – that has a sexual connotation to it. But as the previous poster stated, it’s all in the intention.
Most people would consider the banter I have with most of my female friends, which often includes crude sexual commentary, to be flirting. But it is well established with my friends that I’m happily married and not seeking anything from them. It’s just our form of humor.
Maybe the question then becomes, is there a difference between flirting and actually hitting on someone?