Amount of time to soak decal in water?

Usually about 30-60 seconds for warm water.  Then just use your finger and see if the decal moves side to side on the paper, once it can slide, apply.

I find 20 sec. is enough time.  The key is that the water is warm.

It's preferable not to leave it soaking in a dish of water. Dip it, but take it out and leave it sitting on a hard surface to allow it to absorb the water it has picked up. This minimises glue loss and avoids the decal floating free of the backing paper if left in water too long. Yes, you want it to come off the paper, but not at the bottom of a dish of water.

If you watch carefully as it's soaking, you will see the paper changing from white to semi-translucent as the water displaces air in the paper. When this reaches a uniform shade, the decal will usually release. If not, wait about 10 seconds and try again. 

Note that if there are any spots of glue or paint on the back of the paper, the water will not soak through and the corresponding part of a decal on the other side will not release.

I usually dip for 20-30 seconds, then lay it on a folded paper towel to absorb exxess water. When it begins to slide after several minutes, it's ready to apply. That way, I am using the setting solution I applied to my surface to "float" the decal into place and not the tap water..