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But if he likes me so much (since I give him all holdings in the Duchy) he's not likely to rebel, so it doesn't matter if he's powerful. As for only selecting the best people for each holding, well who has the time to micro-manage that? I usually end up with a vast Empire, so it really doesn't matter to me at all who is the count of Milan or what his stats are, so long as I keep on top of the vassal kings directly under me.

It depends on who you're playing as . As a Christian it may be okay to just let it go, as a Muslim...no. You have to manually go through and revoke every single title from anyone not of your religion and culture and give it to someone with learning and stewardship or the revolts will become a persistent irritant. On the flip side, once done your realm will be far more stable than any Christian's due to your succession law and your (hopefully efficient) eugenics program.
 
Better off with doges then dukes. More cash
Doges on the coast, dukes inland where the doge is only worth 1/4 as much. May as well write off the extra cash and get more and better troops.
 
I have built up some big crusading empires recently, and i what i find most useful is.

Generate holy men, as you will have tons of Piety from winning a holy war. Look at who was generated.

A few stats are bad, like ambitious, those men get appointed as bishops, the rest fill out the city mayors. Counts are generated or family members, if you don't use family members, give the generated count that is most happy with you the duchy. Keep some of you standing forces in the new area if it not close to the capital as you will have some revolts, and your dukes just don't have the manpower to do it alone at first till some of the negitives go away. Even when you get a ambitious duke, it will take them a generation to get a duchy free and clear, and keep a watch out for "double dukes" as those are the men or women who can make your life hell.

Of course, as a christian ruler, i prefer to spread my family out all over the place. So most of the time I hunt down family members to be made into dukes or counts. Also fun/sad is to just let your crusade state free, and watch it fall apart (note: in my most recent game the AI was able to keep a 10 kingdom realm though a some nasty stuff with only losing the kingdom of Brittney in a civil war when France blitz the area as it was fighting for independence.