Stream-Sediment Equilibrium theory relates channel cross-sectional geometry and bed grain size to streamflow energetics and sediment concentration. By applying the theory to outflow channels on Mars using MOLA data, predictions of water level and grain size in channels have been developed. However, limitations on the application of the theory have become evident, and modifications of its application have been necessary. The most important limitation is that the theory works best for very coarse materials and for sustained flow conditions; the latter was not the case for the Martian channels. It was found that many channel segments were in partial equilibrium (i.e., only one bank exhibited apparent equilibrium morphology), and that continuing downcutting occasionally preserved ghost equilibrium bank morphologies above the regionally calculated water surface. Therefore, analysis of paleoflow levels in channels using equilibrium channel theory requires analysis of a significant length of channel that includes multiple cross-sections. The best solution is developed through recursive correlation of flow stage among the channel transects and qualitative analysis of the equilibrium channel boundaries.