> Do you interview all potential candidates, or do you order the candidates based on a few factors such as their resume and the referrers credibility...
Yes, assuming the candidates background/experience is within range; usually a 30 minute Skype/phone screen will suffice as a first step in the process. Decide quickly, either move them forward to in-person meetings or thank them for their interest.
> Second, would the referrer feel the negative consequences of a bad hire.
Yes, match-making humans is tricky at best. We all want to be loved. Same in the workplace. Grown-ups get it.
> Do you fish for the "best" candidate of a bunch or do hire as soon as you find a "hire-able" candidate?
Scorecard what you're looking for in a candidate. Some very basic criteria 1) Can they DO the job? 2) Will they DO they job? 3) Can you live with them?