I just got an RWAP (ugh!) on a book I ordered.  The spine is cleaved and a big chunk of pages is dangling out of the book just waiting to fall out.  PBS automatcially put me back on the wishlist.  Does it reflect poorly on me if I don't want to reorder another copy?  The copy I have is completely unpostable, but I can still read it.  It wasn't a book I wanted to keep, so should I just read the copy (the crappy copy) I received?

No it won't.  I've received a few that I asked for a credit back on and didn't reorder the book.  They were readable but obviously unpostable and books that should not have been posted to FIFO.  I don't mark borderline books RWP because I accept that sometimes I will have to be the one to take a book out of PBS circulation. 

So don't feel guilty if you got a credit back and still read that copy.

Nope. Readablity and postability are two completely different things. 

If it were me, I would RWAP and ask for the credit back, but not reorder, in this case.