Who is a worse friend?

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Strangely enough I think the person that stole $5 is the worse person, because a person that would betray you over such a small amount is morally bankrupt. At least I could understand being betrayed for a large amount of money, but over such a small amount is extremely insulting.
Also, I believe that a persons real character can be seen by how the deal with the so-called inconsequentials in life. If a person is careless in small things, it may reveal their overall attitude toward everything.
If either of the thieves in your story came back saying they wanted to be friends still I would refuse. The only difference, is that I would press charges against the person that stole the million dollars. The other person, I would just refuse to be near them, cease to trust them at all, and regaurd them with contempt.

I tend to believe the opposite: to observe a person's real character by how he or she deals with things of consequence. If that person doesn't take the big things more seriously than the little things, as far as I'm concerned that person has some very messed up priorities as big things are the ones that will actually impact one's life in a very significant way. Sweating over the small stuff beyond a certain point becomes a waste of time and energy. A person may be careless in small things because the person may be more concerned with things of more importance.

That being said, both of the friends who stole money in the hypothetical example are still thieves, and they both suck on a friendship level. However I'd be far more likely to forgive the person who stole $5, than the person who stole $1M. This is because it is considerably easier for me, time- and effortwise, to get another $5, than it would be to get another $1M. I don't see the situation as "do I find this personally insulting?" but rather a more functional approach like "what will it take for me to get my life back on track after dealing with this crap?"