tgello,
I see you're from CT. That means the Texas stories are interesting trivia to you and me (I never knew that about watering the foundation, but it makes sense. I guess you don't want your foundation and yard looking like national geographic pictures of the African Savanna during the dry season/w3tcompact/icons/eyes.gif). Us folks up here in the NE have the other problem - frost heaves - since the water in our soil rarely dries out. It just freezes in the winter.
Regarding a floating slab - thats more or less what a sidewalk is. They are usually poured in smaller sections with strips in between them so that each one can "float" independently. They WILL float every winter, guaranteed! They may settle exactly the same in the spring, or they may stay up high or sink down low. If the sections are too big, they will crack first, then float independantly. Sometimes they will crack even if they aren't too big, especially if the edge is bound against something else.
You ask a very good question about the slab. If it is floating, and you don't "tie" the outside walls to it, what do you do with the inside walls sitting on the slab where they meet the outside wall? I would also like to hear from other cold weather folks who have solved this problem.
One thing I have seen in garage floor drawings are footer "posts". Basically, instead of a footer/foundation at the perimeter, you dig a series of holes in a square pattern spaced every 8 feet apart. These holes go below the frost line, and you pour a footer in each one, leaving some rebar sticking out so the slab ties into these footers when you pour it. I have never built anything this way, so can anyone give some advice?