What is Midrash? This is quite an intractable issue. It doesn’t only contain very wide and very old texts, but also multitudinous philosophers. Even though Midrash is not a good scientific source for studying Bible today, it powerfully helps us understand the spirit of authors from later the Old Treatment, the developing of Judaism, and the constitution of the New Treatment’s mission.
Midrash was an exegetical method used in early Jewish religion. The word usually is used for any written or oral commentary on a biblical text. It is an interpretive act, seeking the answers to religious questions (both practical and theological) by plumbing ?? the meaning of the words of the Torah. (Efron page?) As early as the 1st c. CE rabbinic principles of hermeneutics and philology were used to bring the interpretation of difficult passages in the literal text of scripture into line with the religious and ethical values of the teachers. (Holtz 177-178) One can say that the Midrash on the verse Genesis 1:1 says that “...and some Midrashim interpretation of the verse would go here.”The original purpose of Midrash was to resolve problems in the Hebrew text of the Bible. (Malon) Thus, Midrash exposes the values and worldview of the rabbinic interpreter and audience rather than the original intention of the author of the biblical text.
Midrash falls into two categories: Midrash aggada and Midrash halakha. The root of the Hebrew term is used to refer to Jewish law, halakhah, means "go" or "walk." Halakhah, then, is the "way" a Jew is directed to behave in every aspect of life, encompassing civil, criminal, and religious law. It made possible the creation and acceptance of new liturgies and rituals which de facto replaced sacrificial worship after the fall of the Second Temple, and the maintenance of continuity by linking those practices to the words of the Torah.(Mahlon) Midrash aggadah investigates and interprets the meaning, the values, and the ideas which underlie the specific distinctions which govern religious life. The rabbis themselves state that the aggadah is not authoritative and insist that no halakhah may be derived from aggadot, but it is held in high esteem concerning insight and piety. (Midrash 101) In line with the accepted tendency to define aggadah as "that which is not halakhah," one could say that the relation between aggadah and halakhah is similar to the relation between theory and practice, between idea and application, and, in the area of ethics, between character and behavior.
For instance, a Midrash may attempt to explain why Adam didn’t stop Eve from eating the forbidden fruit in the Garden of Eden. One of the best-known Midrashim (plural of Midrash) deals with Abraham’s childhood in early Mesopotamia, where he is said to have smashed the idols in his father’s shop because even at that age he knew there was only One God. Midrash aggadah can be found in both Talmuds, in Midrashim collections and in Midrash Rabbah, which means "Great Midrash."
The largest volumes of Midrash aggadah are often referred to collectively as Midrash Rabbah. Midrash Rabbah, which forms a complete commentary on Genesis, and exemplifies all points of Midrashic exegesis, is divided into parashiyot (sections, chapters); and derives its peculiar character from the proems which head these sections. For example:
“A philosopher said to R. Gamaliel: Your God was a great craftsman, but he found himself good materials which assisted him: Tohu wa-Bohu, and darkness, and wind, and water, and the primeval deep. “ (Midrash Rabbah)
It is essential to note that the “philosopher” insists that God, though a great craftsman, was “assisted” by five materials, all of which had a cosmogonist function in pagan mythology. The violent reaction of Rabban Gamaliel is inexplicable on the assumption that the “philosopher” merely alludes to creation from formless matter. Rabban Gamaliel: God created everything out of nothing. Midrash Rabbah contains many simple explanations of words and sentences suitable for the instruction of youth; and also the most varied haggadic expositions popular in the public lectures of the synagogues and schools. It is simple and sublime.
An important use of the Midrash is that it gives the interpreter of Scripture a greater insight into interpretation from a people closer to the original appearance of the Old Testament books, as well as an understanding of the text across history by Jewish people. Stories contained in a Midrash may be totally historically accurate or simply a piece of fiction based on history, or even a work of literary fiction without any basis in history.
I would like to see much more careful analysis of Holtz: purposes of midrash; assumptions about the nature of Torah’s text.
Citation
John Efron, et al. The Jews a History. New Jersey: Pearson, 2008.

Holtz, Barry W. 1984. Midrash Pp. 176-211 in Back to the Sources: Reading the Classic Jewish Texts. New York : Summit Books.

What is a Midrash? Web 3 May 2012. http://www.faqs.org/faqs/judaism/FAQ/03-Torah-Halacha/section-25.html Midrash 101 Web 3 May 2012 http://www.myjewishlearning.com/texts/Rabbinics/Midrash/midrash_101.shtml Mahlon H. Smith. Midrash. Web 3 May 2012.
http://virtualreligion.net/iho/midrash.html