Should all Federal Pacific panels be replaced?
Concurring mostly with Some Guy's answer here -- the reason why I take an aggressive tone in my other answers regarding FPE is because many of the OPs are coming to us because they want to do something to the breaker box, such as adding a new circuit or replacing a breaker that "died".  Note also that all of this advice applies to panels labeled "Federal Noark" or just "Noark", as well as Canadian panels labeled "Federal Pioneer".

Trouble Brews in the Panel

I will start by linking my main source here, the latest revision of Jesse Aronstein's paper on the topic.  In short, there are three main problems with the FPE Stab-Lok system:


All Stab-Lok breakers made since Federal Pacific Electric acquired the line (from Federal Electric Products circa 1960) are likely to be miscalibrated (high) -- this includes substitute types (the calibration means in the Stab-Lok design was extremely poorly thought out)
The FPE Stab-Lok common trip mechanism is a common no-trip mechanism that can jam the breaker closed if only one pole trips -- this also renders Stab-Lok GFCIs highly failure-prone.
Some Stab-Lok busbars use an undersized screw and post to connect the clip to the actual busbar, leading to overheating of the busbar system with its attendant fire dangers.  Stab-Lok breakers have also been said to be prone to coming loose from their busbar mounting due to their dependency on the front panel for retention.


and three follow-on problems that stem from the system's obsolescence:


The arc fault breakers that have been developed for FPE panels cannot be relied upon due to the common-trip jam issue, rendering it impossible for even a FPE panel with likely-good (pre-1960) breakers and a reliable busbar design to meet the current NEC.
Stab-Lok breakers cannot be safely replaced.  More on this in a bit when I talk about the history of this sordid affair.
Many Stab-Lok panels are "rule of six" or split bus, rendering a jammed two-pole branch breaker much more dangerous than it would be in a main breaker panel.


as well as one final problem that seems to be connected somehow to the common-trip jam defect:


Switching off a two-pole FPE breaker may fail to disconnect power from the circuit.  This is possibly linked to common-trip jamming, as it appears that two-pole FPE breakers lack handle ties, relying on the common trip mechanism to shut off the other pole when a pole is shut off manually.


Digging into the Past

Federal Pacific Electric started off making electrical switchgear, but in the 1950s some folks at a company called Federal Electric Products came up with a circuit-breaker and panel design to jump in on the building boom (and newfangled invention of residential circuit breakers) that was going on at the time.  Production started up in the 1950s, and went smoothly for a short while, at least.

Then, FPE acquired FEP in 1954, and proceeded to trademark the name Stab-Lok for their newly acquired circuit breaker, due to its unique design which used a "stab" terminal on the breaker that mated with a slot in the busbar; other panel designs use a tab on the busbar that mates with a spring-clip-type contact in the breaker.

However, for all its infelicities, the Stab-Lok would have not earned its infamy had it not been for the work of some even dimmer bulbs in the testing department at Federal Pacific Electric in building an elaborate testing apparatus for the sole purpose of fooling UL into allowing them to accept breakers that were actually outside of the UL standard criteria.  This hoodwink started about the time FPE acquired FEP and continued for many years, until FPE itself went bankrupt and went through multiple changes of ownership, first by a holding company known as UV Industries, and then being acquired by Reliance Electric.  Reliance began to sniff around, and what they found shocked them -- causing them to suspend FPE executives without pay, and UL to start delisting the FPE Stab-Lok line.  By 1982, the Stab-Lok line was well and truly out of production in the US, and Reliance was well on their way to suing FPE/UV for their deception.

At about the same time, the CPSC began to investigate this issue in earnest; however, in about 1983, Reagan-induced budgetary shortages and the negative precedents from the aluminum wiring case conspired to force the CPSC to abandon their investigation before they could come to a conclusion; all that came of it was a generic press release that neither exonerated nor found any definitive fault with the FPE breaker line.  As a result of this, no recall was actually ever issued for the FPE breaker line, and there may never be a recall of the product, lest the aluminum wiring court debacle repeat itself.

After this, FPE basically was broken up -- their US switchgear plant went one way (to Westinghouse to be converted for aftermarket breaker manufacture, then possibly to Cutler-Hammer and then closed down by C-H only to be reopened by its manager as an independent company), their US breaker line formally went another way (to Challenger Electric who proceeded to sell it off to a company that eventually became American Circuit Breaker Corporation), and their Canadian breaker line went a third direction (being absorbed into Schneider Canada).  This led to some infighting between the US and Canadian sides -- as part of this, in the early 90s, the two products were acknowledged as identical and interchangeable in the course of the ensuing court case, which was settled in 2005.  Schneider Canada, of course, is not forthcoming about any of this; however, there have been sporadic recalls of Stab-Lok-type breakers that appear to be of somewhat later designs than FPE's original type NA.

A class-action suit was filed against the remains of FPE in 2002 in New Jersey; however, the ensuing judgement and 2008 settlement, while finding that FPE did violate state consumer fraud statutes, provided very little right of recovery for New Jersey homeowners, and no help whatsoever outside of NJ.  Finally, in 2011, the CPSC issued a clarifying note to their original 1983 press release that more explicitly stated that the CPSC had to close their investigation before they could publish findings.

A Sorry State of Affairs

All of the preceding history aside, here is my guide to "I see a FPE panel, but it's otherwise apparently OK, I'm not trying to add anything to it, and this house isn't changing hands any time soon", in it, "as soon as feasible" means "as soon as you have the money to hire an electrician to come out", not "when I'll get around to it" or "oh, that'll happen when we remodel":


Are there any signs of busbar damage such as hot breakers or buzzing sounds?  If yes, then the panel is defective (trying to catch on fire) and should be replaced as soon as feasible -- continue to the next section.  If it is not, then continue to step 2.
Is this panel a main breaker panel, a "rule of six" main panel, or a subpanel?  If it is a main breaker panel, then go to step 3; a "rule of six" or "split bus" main panel, then go to step 5; and if it is a subpanel, then go to step 6.
Are there screw ends (not screw heads!) visible along the centerline of the panel (i.e. between the breakers) with the dead front removed?  (Follow all applicable safety precautions when removing the dead front.)  If so, this panel has the undersized screw-and-post busbar-to-clip connections and is likely to pose a fire hazard in the future, so it should be replaced as soon as feasible -- continue to the next section.  If not, continue to step 4.
The reliability of Stab-Lok main circuit breakers is suspect; there is some evidence available, mostly for smaller sizes (90A/100A), that implicates them as having the same flaws as their smaller brethren, although the reliability of Stab-Lok mains that use a larger frame size is unknown.  However, the main circuit breaker construction provides a minimal degree of redundancy should a branch breaker jam or otherwise fail to trip.  Panel replacement in this case need not be your first priority, but should be urgent nonetheless as there are issues with the main-breaker-to-busbar connections in some FPE panels being quite undersized -- schedule it alongside any other electrical overhaul work that needs to take place (such as aluminum wiring pigtailing, replacement of defective branch circuits, or any panel alterations that need to take place).  Continue to the next section for panel replacement options.
Unfortunately, the "rule-of-six" design, while otherwise Code-compliant, conspires with the common-trip Stab-Lok jam defect to create an extremely hazardous situation; a jammed two-pole breaker in a rule-of-six main panel is equivalent to wiring a 240VAC appliance directly to the service-entrance cable!  Replacing the "split-bus" or "rule-of-six" panel should be done as soon as feasible.
In the case of FPE subpanels, the main breaker panel should be examined -- if it is FPE as well, then go back to step 1 and examine the main panel.  If the main panel is not a FPE Stab-Lok type -- the feeder breaker in the main panel will provide limited protection against gross faults and jammed breakers until the subpanel can be replaced -- so you can replace it along with other electrical work.


Panel Replacement Options

There are two options available for the replacement of FPE Stab-Lok electrical panels; either the panel is replaced in its entirety with a modern panel, or gutted and retrofitted using an Eaton retrofit kit to convert it to a type BR or type CH panel.

Of the two, the retrofit kit is more costly parts-wise ($500 for a retrofit interior vs $200 for a new panel); however, if your panel is large enough to accommodate it (due to wire-bending space issues in older panels caused by the 1982 changes to the NEC), the retrofit kit can be installed in the existing enclosure, which is a significant labor savings over having to remove the enclosure entirely and install a complete new panel.  Another factor that complicates this is while BR retrofit interiors can take tandem/quadruplex type BR breakers, tandem GFCI, AFCI, and DFCI breakers don't exist due to the space required for the electronics -- this significantly restricts the utility of the retrofit kit when the wiring is not grounded, or a significant number of GFCIs, AFCIs, and/or DFCIs need to be installed to meet current Code circuit protection requirements.

Why Not Replace the Breakers?

Unfortunately, both NOS (new old stock) and newly-manufactured type NA breakers are available on the market these days.  Some may be tempted to go "hey, I'll just replace the crummy old breakers with new ones, and it'll be fine now!"  However, there are three problems with this approach:


While Schneider Canada does make a Stab-Lok AFCI breaker, it 1) is not certified for use in the US (only Canada) and 2) may still suffer from the same design flaw as the Stab-Lok GFCI (namely, common-trip jamming, as the Stab-Lok GFCI was a two-pole half-width Stab-Lok with GFCI electronics hung off it).
There is no evidence whatsoever that NOS or newly made Stab-Lok breakers are better than the crummy old ones -- no matter what the era, the Stab-Lok is fatally flawed, save for some extremely old (pre-60s) units that appear to have been calibrated correctly.
Circuit breaker replacement does not address the busbar defects, which are just as dangerous as the breaker defects, if not more so -- there have been field failures where FPE panels overheated and ignited internally due to busbar contacts coming loose.


I want to add another circuit!  My electrician was doing something else and said it needed to be replaced!  My lights are behaving weird and the electrician is blaming the panel!

In all of these three cases, or in any other case where an electrical panel alteration, such as:


adding breakers/branch circuits
removing breakers
replacing a breaker that is "dead"
replacing a breaker with one of a different amperage rating
upgrading the service
rewiring existing branch circuits with new "home runs"
or, any troubleshooting that casts fault at the breakers or panel


is called for, this is a sign that the Stab-Lok panel needs to be replaced; see above for replacement advice.

I'm buying/selling a house, and the inspector found a FPE panel!

First off, good on the home inspector -- not all of them keep up on such esoterica as faulty electrical service equipment!  The advice from here depends on if you're the buyer or the seller.

I'm buying a house with a FPE panel in it, what should I do?

In this case, making replacement of the panel a condition of sale is wise -- now would be a good time for a general electrical overhaul, as well, and the best part is that it may be possible to do a bit of creative financing on the seller's side to use the proceeds from the sale to finance the electrical work at the end of the day.

If that's absolutely impossible, the panel should be examined by an electrician for any sign of overheating or internal arcing that poses an immediate fire hazard, at a barest minimum.  "Exercising" or "testing" FPE breakers in situ is hazardous and should not be attempted under any circumstances.

My house has a FPE panel in it, and I want to sell it

Just replace the electrical panel, alright?  Electricity is different from many other household systems (such as HVAC, plumbing, or even structural) in that the system can appear to function normally (unlike a leaky pipe or a clearly bowed beam) while posing grave dangers to the house's occupants -- a shorted dryer drawing 1000A of current until the utility's fuses blow will catch on fire, despite everything appearing to be normal up until the moment the dryer shorted out.

I have a FPE panel and/or FPE breakers laying around, what should I do with them?

First off -- do not sell this stuff.  There is a "black market" for old FPE hardware, and given the out-and-out danger it poses, getting involved with said black market is beyond unwise, it is complicit in endangerment.  Throwing it away is also not ideal option either, as it represents evidence of FPE's failings, but if you must toss it in the can, taking steps (such as double-bagging) to thwart trash-pickers is a good idea.

A better idea than simply trashing evidence, though, is to send it to someone who can add it to the record.  Jesse Aronstein has been performing independent testing and research on residential circuit breakers, including FPE, for almost a decade now, and has published results not only in the reports I rely on here, but in a journal paper as well, and would be happy, I am certain, to receive more FPE hardware to add to his collection; so I would recommend contacting him through his website and offering to donate your FPE hardware to him.