1. I think the actual number is eight or nine, rather than six, but I can't find a trustworthy source for the exact number. I feel like I've seen the post converted to wiki at different revision numbers.
2. Any revisions that happen within five minutes of each other count as a single revision.
3. If four different users contribute to a post, it is CW-ed (CWfied?), even if there have only been three revisions.

It's a bit of a tricky issue, and there's a fair amount of discussion about CW on meta.SO. The point is that you want to put some sorts of caps on all behaviors; if too much of a thing is going on, something's up. Unfortunately, converting to CW is the de facto way to deter too much editing. I can't think of a better one.

Why deter lots of editing? Because it's annoying. When you edit a post, it bumps the question to the top of the homepage,† which can get old quick. Even without that effect, I would really prefer that people make substantial edits. If you're still thinking heavily about one of your posts, don't edit it every time you have a new thought. Wait an hour or two and then commit whatever changes you have.

†Why bump questions to the homepage with every edit? For oxygen. Part of the magic of the SE framework is that it circulates posts so that anything that somebody finds interesting, other people are invited to find interesting as well. This keeps threads from becoming stale or outdated. If something happens on a question, people should be encouraged to check it out. Of course, there's the question of what constitutes "something happening". For example, you could argue that any edit that changes fewer than five characters constitutes fixing minor typos and should be ignored, or that a retag shouldn't count as an edit, and I kind of agree. Comments don't count as "something happening" so they aren't subject to immediate review by lots of people, which is why you need 50 rep to comment.

I'm actually pretty happy with switching to community wiki after 6 edits. That many edits perhaps suggests that more might be necessary or useful, and having a post community wiki lowers the reputation threshold for people to edit. Further, after that many contributions form other people, maybe it makes sense that the original author doesn't necessarily get any further reputation, although I'm unsure on this one,

@Hanche -- no.