I recently had occasion to try out setting up Drupal as a Wiki. On the whole, I found it a positive experience with some minor niggles.
The first step was easy: download the Wiki installation profile and install it. I picked the Drupal 6 version even though it's marked as unsupported, because once installed all that's required to bring it into line is to apply the latest core and module updates. If you are familiar with installing and updating Drupal, this first step is a piece of cake.
I wanted my wiki to be available to registered users only, so the next thing I had to do was to edit the user permissions and turn off anonymous access. I'd recommend reviewing these permissions even if you are going to allow anonymous access, just in case there's something in there you don't want. It's easy enough to turn a permission back on again if you make a mistake.
My user accounts are invitation-only, so I also needed to change the user settings to reflect that.
The profile provides two content types for wiki use: the Wiki and Book Page types. There doesn't seem to be any real point in having both types as far as I can see, because either or both can be used to create wikis and / or book style hierarchical documents. I decided to use the Book Page type and stick to it, so I configured both the Book module and the Freelinking module to create Book Pages by default.
Freelinks are one of the key features of a wiki. They give you the ability to add links to other wiki pages regardless of whether they exist yet or not. Clicking on a freelink to a page that does not yet exist takes you to the content editor so you can add it. This is a great productivity tool.
You can choose to create free links using the syntax "[[Title of new page]]"; this works out of the box. You can also use the Camel Case convention, ie TitleOfNewPage but that option has to be turned on. In either case, the links are styled identically whether the target page exists or not, which is a drawback compared to dedicated wiki sotware, where links to uncreated content look different and consequently are easier to pick out.
There's a Freelinks page which is accessible via the navigation menu which lists all pages and whether they have been created or not. On a large site this will become somewhat unwieldy. There's also a block which is supposed to list only links that have not been created, but that list was always empty when I tried it.