1) I've read to start quilting from the middle and working my way out. But, if starting in the middle, how is the beginning stitch secured so that it doesn't come undo later down the road? Or is that even a factor?
If using the same thread as the background or primary color of the top then I might do a couple back stitches, I usually leave tails and bring bobbin thread up and bury the threads into the batting. Some will do several short stitches to lock the stitching line.
2) Is there a certain setting I should use in regards to stitch length or width or just use a setting that is already programmed in the machine?
This depends on whether you are quilting with walking foot or fMQ. For Walking Foot. I will bump the length up a bit - perhaps a cople clicks to accommodate the batting. If FMQ, you don't need to set the stitch as feed dogs are dropped and you are controlling the stitch length. If you have not done FMQ and you don't say you have, I would suggest lots of practice first and not use the quilt as an initial practice piece. It takes learning the technique.
3) Can the walking foot only be used to quilt straight lines? Or can I do gentle curves? I know the free motion foot is used for random stippling and such.
Gentle curves can be done. They can't be too tight and is easier not to have to turn the quilt too much.
4) Has anyone ever used the fancy stitches on the machine to quilt inside the seams (about 1/4" away from seam itself) on the small pieces of the quilt block? Or is that too hard as I would have to use the different feet with the different stitches?
Fancy stitches can be done but takes some effort. First, fancy stitches for forward and back. The walking foot should only be ued with a stitch that goes forward with almost no back motion. Also, if you lengthen the stitch it might not show the stitch as originally programmed since most are small tight stitches. So I would choose carefully the stith used and select one that works with the walking foot.