I think what method you use depends on whether you have a false bottom in the pot or not.
If you do have a false bottom, keeping the heat on low and recirculating is a very even way of heating. It's sort of like a manual RIMS except the heat is applied to the mash tun rather than the recirculating loop, but the effect is pretty much the same. You still have to stir to get the even heating, and it helps to have a more liquid mash. The downside is that stirring the mash can make it harder to recirculate, so be careful about disturbing the grain bed too close to the false bottom.
If you don't have a false bottom, you're essentially doing a decoction. So you definitely have to stir, and you will likely get some color development. A thinner mash is better, since it will keep it from scorching. Use a metal spoon so you can feel the bottom of the kettle for any build-up, which can scorch. A scorched mash tastes like an old ashtray.
German mashes tend to be thinner than English mashes since they often pump them around. It might just be easier for you to start thick and just use boiling water infusions.
If you are going to step mash in one pot without a false bottom and with direct heat, I'd use a relatively thin mash, maybe add some rice hulls, add the heat slowly, and stir constantly. It's important to get the heat evenly distributed, so you'll have to be stirring in a way that mixes the layers (think about making the grain on the top coming into contact with the bottom of the pot). Try to avoid whipping excessive air into it while you're doing this. Keep stirring after you kill the heat; the bottom will still be hotter, and the temperature will continue to rise (like carry-over cooking with meat).