To expand on my comments, the answer to your initial question is in the excerpt for the featured tag (emphasis mine):
A special moderator-only tag to mark important meta discussions. A question with this tag can be seen on the main site, in a special sidebar, in the questions list, and when viewing individual questions.
So the sidebar appears to list faq posts and featured posts.
As far as changing the header text to some other than "frequently asked", I'm not convinced it's necessary. That feature has been around since May 2010, and I don't see a lot of confused posts on Meta about it.
And if it did change, I'm also not sure what it would be changed to without causing the header to be two lines* (all of the other headers in the sidebar are one line. I'm not a UI / UX person, but that seems intentional).
*Unless we go with Conrad Frix's idea, which I fully support =)