In coming up with the answer to the Critical Flaw, I was wondering how basically a critical flaw plays out. Is it something that necessarily has to appear in the story or can it be something that “threatens” to come out, that the character struggles with throughout the story? One example I can thing about is a character who is a recovering alcoholic who still deals on a daily basis with the temptation to return to his old ways.
That’s a good example of a Critical Flaw but you always want to tie it into the Overall Story as that is what that Appreciation is all about. It ties the Main Character to the Overall Story. It’s why he or she is in the story.
As far as doling it out to the Audience, under normal circumstances you’ll want it to come out at least once per Act. I have found that if time is scarce (as in a treatment) you can get away with just showing it twice – maybe the first Act and then the second–depending on the Overall Story Outcome.
And I would suppose that when it does come out, it ends up causing more problems instead of fewer?
Oh, good… So now there’s this “hidden Dramatica” where everything goes bizarro when you flip the Change/Steadfast switch? 
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No that is incorrect. The Critical Flaw prevents the MC from using their Unique Ability to solve the Overall Story Problem and have it result in Success. It doesn’t change because the Resolve has changed.
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So, would you say the MC either overcomes the critical flaw or does not? Or, despite the MC’s Critical Flaw the MC’s Unique Ability makes it possible to have a Successful result or if the Unique Ability is not applied or able to overcome the Critical Flaw the story ends in Failure?
The assumption would be that if the Outcome is Failure, the Critical Flaw overcame the Unique Ability, yes. It can also echo out into the Story Judgment of Good/Bad, depending on how closely the MC and OS throughlines are tied together.
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Key, you might be thinking about the IC Unique Ability & Critical Flaw, not the MC’s. (That may be the source of your mis-remembrance … mis-rememberment?..mis-rememory?) Which is “good”, the IC’s UA or CF, and which is “bad” depends on the Resolve, the Outcome, and which character is proven “right” at the end.
Thanks, Jim and Sandy, for straightening me out. I just deleted my incorrect-recollection posts, to avoid proliferating any further confusion.