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IMO (or maybe I read it somewhere) "FAQ" is a web cliche, and falls into the same category as "click here" and "welcome to my web site," something you use when you can't think of anything else.
From an average user standpoint, they consider their quandary unique and new, how can that be in frequently asked questions?
However, you see "FAQ" everywhere, even on larger successful sites, so I don't know that it would matter one way or another. "Help" covers a lot more territory. Behind a "help" link I'd expect to find a FAQ, knowledge database, and contact links if I'm too lazy to search either of those.
Now if you'll excuse me, I'm off to give my evil twin 30 lashes . . . . .
People tend to look for "faq" once, and only once, before they have every run into problems ... "help" when they are stuck ... "support" when they are frustrated (read: do not remember the FAQ entry, or "help" proved insufficient) ...
You can also toy with words and phrases like "solutions" or "guidance" ... although straying too far off the conventional track may cause negative results.
"Help for this page" has done wonders.
Instead, call it help or support - combine search navigation and a tree structure to help me find my answer - and integrate a way for me to ask you easily should I not find it.
Don't try to pretend knowing what everyone will ask. Most FAQ lists contain none of the actually "frequently asked" questions at all, but rather a set of questions to which there is a standard answer.
FAQ is only ever a solution once you have actual "frequently asked" questions to create your list from.
I see lots of new sites/services that have employed an FAQ section.
"Dude, your site is brand new! There cannot be any asked questions yet of any frequency."
While a new site won't have encountered any problems there are a few basics that you can probably start with but an FAQ should be a living document and be updated when issues occur or are resolved.
I'm working on a site where a combined (and prominently linked in the main menu) FAQ/Help page seems also to include Terms and Conditions in a more friendly form. (There's additionally a separate T&C page in legalese that's more or less buried in the shopping cart.)
I've been wondering about whether to suggest they rebuild the FAQ as a series of separate pages, and perhaps even add a glossary, and go after a lot of long-tail phrases... or whether to keep it as is because it's prominent and more likely to be seen by customers than if broken up into separate pages and linked deeper.
Sectioned help/faq/etc is not a bad idea, if warranted by the size of the content.
Each section could benefit from being a separate page, although (for example) the FAQ itself should be kept small enough to fit on a single page. Large FAQ pages are often a sign of the Questions-We-Think-People-Will-Ask-But-Which-Are-More-Often-Than-Not-Very-Helpful-To-The-User-But-Rather-A-Feeble-Attempt-At-Looking-Spiffy syndrome ... I would start by helping them identify which questions are truly FAQ, and which better belong in an "Occasionally Asked Questions" (aka "Help") section. Perhaps they can also be condensed?
Any page that offers a product/service that is likely to raise questions gets its own 'article' link. This is an informational page that will head off most questions. (Probably a lot like DrCoc has suggested.) If we feel that it could be particularly useful for people, we offer it as a download or print ready PDF informational sheet. This technique has been extremely effective and people comment that our sites are very 'informational'. These pages do very well. The email and telephone traffic will tell you if it working. Too many questions indicate a problem. These pages provide information that would 'get in the way' of presenting the product or service, and the prominent 'page specific' link to additional information works extremely well for us.
We are big fans of FAQs for questions that are much more general and don't work well as page specific 'additional information'.
It has been my experience that 'fully searchable' sites are next to useless - returning umpteen gazillion results. I'm gone. A well organized FAQ will usually do the rick. Break it into subject sections, and sub-sections and the list of Q&A for each probably won't be especially long, and the answer to your question probably won't be hard to find. Users that can't muster that much effort are welcome to leave. If they send an email we will most likely quickly return a link that answers the question. If they call us they are wasting our time and better spend some $$$ :))