Originally, I think that was actually the intention (hence why even though there are space for three stars, only two are filled). I suppose it's mainly because our staff groups now have their own member group colours which make them easy to identify, and all groups with access to moderation powers now have their own banners atop each post, so another way of identifying staff wasn't really needed. Beyond that, it also serves to help differentiate between the Moderator and Community Moderator usergroups, as they're fairly similarly named and there's a lot of overlap in our roles, and having stars on one but not the other makes for more of an immediate visual distinction than having different numbers on each. If ever there's confusion about the staff hierarchy in the future it's definitely something we'll consider updating, though.
We don't really have a set criteria, oddly enough. If there's a space open, we'll look around the forums and pick out a few members who we 'feel' would potentially make good moderators: in general, we look for people who clearly put a lot of time into reading the forums, who seem to keep a cool head when faced with arguments or abuse, who are confident without being arrogant or abrasive, who have a healthy respect for the spirit of the rules, who have a sense of fairness and can be relied upon to put their duty above personal feelings, and whose personality seems like it would fit well with the rest of the moderating team.
Once we've agreed on a candidate, one of the orange Moderators will approach the candidate and offer them a chance to train. If they accept, the candidate is then secretly given access to a restricted set of moderator powers and taught how to use them, including things like how to manipulate topics, access and deal with reports, and the warning point system: we keep a few spare accounts around for them to practice on during this time, as it's only toward the end of their training period that we'll ask them to perform any moderation directly. Training usually lasts between two weeks and a month after they've been taught how to use their powers, and during this time we'll test them with things like hypothetical scenarios, past cases, and ask them to comment on active reports explaining how they would deal with the situation. If it seems like they're fitting in and coming to the same conclusions as the rest of the moderating team, or at least showing sound judgement and correctly applying moderation guidelines, then they'll eventually be offered a place amongst the moderators and if they accept once more, they'll receive the full set of moderation powers and go public.
Occasionally, things don't work out: if there are consistent errors in judgement, bad application of moderating guidelines, misuse of powers, or even just changing their mind at the end of training, then the candidate will go back into their original member group. This is one of the reasons why we'll never talk or unveil about candidates publicly, and it's one of the few things that we don't discuss with other staff groups, as there's a certain stigma to not becoming a moderator after training and we don't want to hurt anyone's standing on the site, or allow other members to put pressure on them during their training. At any given time, someone on the site could be wearing purple, green, silver, or even a staff colour whilst actually having a restricted set of moderator powers, and there would be no way to tell.
Ultimately, there's not really a 'best' way to be offered a role on the moderating team: a lot of it just comes down to being around at the right time, and to being a solid part of the community whilst being willing to cut yourself off from the community if need be. For all that being part of the moderating team can bring a lot of popularity, some days you're going to be the bad guy, and while a lot of the time you'll be dealing with people you don't know and who're obviously out to cause trouble, on some days there's going to be a lot of grey and you're going to have to moderate someone you like. I think everyone on the site has someone who they're particularly close to, or respectful of: if you can honestly say that you would be able to ban that person and ruin that friendship if the situation called for it, then you have perhaps the most important quality we look for in a potential moderator. A lot of people can't do that, and there's no shame in it - it's the worst part of the job, and I hate having to do it - but it is necessary and it's the thing we stress the most when making the final offer to someone who's completed their training.