Basically, you just create an FAQ book within the Knowledge Base. You start by creating a book page that will be the table of contents. Then, instead of listing all the Q&As in the body text, like we do now, you create a new book page for each, with the question as the page title and the answer in the body text. You select the main FAQ page as the parent, and all the questions will be listed on that page.

What's really cool is that you can then go to other posts on the site, like the questions people put in the blog section, select the "outline" tab, choose the FAQ book, and that blog appears as a Q&A in the FAQ.

This process is explained at http://drupal.org/node/23701.