My thoughts - in line with Krishna, Pankaj, Anshu & Binoy. Moderators need not be experts - their primary goal as mods is to help keep the sanity of a thread (in terms of cordiality, manners and so on). So that requires a level of objectivity and maturity which does not necessarily come with technical knowledge. By all means its an added benefit if the moderator is technically good too - helps him identify potentially misleading posts sooner and take corrective action.
 S = k.I^2, where S is the amount of stupidity a species possesses, I is the intelligence the species has and k is the universal constant of stupidity.
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