when is it appropriate to mark the "community wiki" checkbox while posting an answer to a question?
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I use it when I don't feel I've done anything to deserve reputation, typically when I'm just quoting documentation. This isn't an 'official' appropriate use, necessarily.
When you want to make the answer editable by users that would otherwise be barred by insufficient reputation. You should click the checkmark if your post is likely to be frequently updated in the future (eg. a FAQ post).
Making a post Community Wiki represents handing the post over to the community for curation.