To add to what Wallace states, some view this passage (as rendered by the KJV alone) as speaking of the Christian life in general:
John MacArthur once wrote:
1 Thessalonians 5:22--"Abstain from all appearance of evil. " That verse doesn't refer to something that only appears to be evil but really isn't; it means that as soon as evil even appears you had better get out! Don't stick around. When you hear a perverse mouth or see evil behavior--get out. As soon as it appears, be gone. Don't sit around long enough to figure out whether it's evil. If there's any doubt, be on your way.
MacArthur, writing about sin in general rightly interprets the verse but wrongly applies it. This verse is NOT talking about evil in general or something that appears evil, but specifically real evil in doctrine.
The greater context bears out the meaning:
1 Thess. 5:20-22
do not despise prophetic utterances. But examine everything [carefully], hold fast to that which is good; abstain from every form of evil. (NASB)
The context relates to the church and doctrine specifically, not to anything someone might consider "evil". I've seen this verse misused to place legalistic binds on believers considering celebrating Halloween, drinking alcohol, using Proctor & Gamble products, going to movies, and just about every other activity imaginable.
One person told me that since my Facebook profile contained links to secular music groups I was somehow in violation of this verse.
I understand the desire for purity, but let's make sure our purity and piety is based on trustworthy texts and exegesis and not on some legalist's view of a particular text.