A wiki page allows people to write and erase as if it were a forum thread with one post that anyone can alter. Some people use them to post links to their sites. They're emerging as a major weapon in the nigritude ultramarine battle.
It has been suggested that our new radio station use this to set programs and update scheduals on a word document or excel page. This allows us to work on the same page one at a time and update it at will.
Of course wikis emerged not as an SEO tool but as a means of collaborating on content. The Wikipedia is one example of how this can work. For their entry on "wiki" you simply click edit and see a page similar to a forum posting page where you can alter the text.
The Wikipedia creators hope that you add to their definitions, correct spelling, make a better rounded picture of the world.
As wikis have been around since 2001 they've developed methods for dealing with vandalism, including banning IP addresses, IP blocks in the case of persistant vandals from major ISPs and, of course, databasing their entries. However, "more problematic are subtle errors inserted into pages which go undetected, for example changing of album release dates and discographies on Wikipedia."
Philipp Lenssen, in his quest for top position for the term Nigritude Ultramarine (he's at second place now), has spammed many a wiki, as he says in this blog post.
Rather than busting up the hard work at Wikipedia or any of the other more organized wikis, Philip focused on the sandbox wikis - wikis set up just for play/free posting. (Not that the sandbox policy is an invitation for your links.)
Besides being, in my opinion, a shady method of link building, "everybody is... ...free to delete your links and replace them with their own. This makes it a constant game of going through a lot of sandboxes and leaving your backlink. In fact when I visited the sandboxes I found a lot of links already pointing to other Nigritude Ultramarine sites; or links pointing to commercial sites using commercial search phrases."
While I do believe that, as Ammon Johns said, "there are no hats," this particular method of building back links seems to take undue license with other people's projects. It's on par with guest book spamming and "me too" forum posts to build links. (Philipp disagrees - read more in WebProWorld.)
Still, it's a tactic that your competitors may be using to rank higher. Search for their business name + wiki and see what comes up. If you find your competitor's gone on a wiki spamming spree and you're really feeling snarky write up a form letter decrying their tactics and follow their wiki trail. Be sure to send a copy to the wiki owner along with their IP address.