There is an entire FAQ devoted to this subject here: FAQ Owner's FAQ
To create a new FAQ (meaning a completely new FAQ, not just a single entry), first go to this page.
If you're convinced that there is no existing FAQ that covers your subject, scroll all the way to the bottom of the page.
In the box, enter the short name for your FAQ. If it was for the Acme Widget forum, you might call it "acme." Then click on the "Create/Retrieve" button, and your FAQ will be started.
Next, enter the following URL into your browser address bar:
/faq/ and at the end, add the short name that you entered above. This will be the address for your FAQ.
On your new FAQ page, you will see these items:
Clicking on "Edit FAQ Properties" will take you to a page where you can start entering your headers. Pay close attention to the following info, because it's far easier to set these up correctly than to try to re-arrange them later.
How to write a FAQ
Rule #1 Use a numeral (1-2-3-4) as "index" characters in the beginning of a header. It will allow you to add subheaders later and will always "index" numerically top down. Yes, you can skip a number and come back and use it later. In fact, it's a real good idea to skip numbers at this stage so that later you have the ability to enter new headings in between existing headers. (Note: you can enter numeric and header data in any order in "create FAQ" edit boxes.)
1. Main Header
1.1 Sub Header #1
1.2 Sub Header #2
2. Header #2
(3. not used)
4. Header #4
4.1 Sub Header #1
(5. not used)
(6. not used)
7. Header #7
Yes it is legal. You can come back and add 3, 5 & 6 later or 5.1 & 5.2 & 5.3.
Rule #2 Do not use alpha characters (A-B-C-D) as "index" characters in a header. SQL and data base processes do not cope well with alpha characters as "index" characters in a header.
Your great design scheme may come out like this:
C. Header #3
E. Header #5
A.1 Sub Header # 1.1
A.2 Sub Header # 1.2
A. Header #1
B. header #2
D. Header #4
3. Define the header name well. If it is vague, it will have to be re-edited for clarity later. If there are Q&As under the header, they will have to be edited to "new" header line later. (See next item.)
4. If you change the header name, the old header name will also show up in the FAQ along with the newly edited header name. You will have to edit every Q&A under the old header name and set each one to the "new" header name. After all the Q&As are removed, the old header name will disappear. It only continues to show up (old header) because some of the Q&As still appear in the old category. (Thank you, mballard.)
5. When doing a Q&A, you have the ability to place the Q&As in a specific order. Just use the UP and DN links to move questions around..
Original info submitted by GreyWolf, revised and updated.