Although some customers request using a Word Processor for producing documentation, if it is my choice I like Latex and OmniGraffle for producing diagrams. Latex is the fastest tool (that I use) for producing great looking print or PDF documents.

I am experimenting with something else this morning: the YUML web app for creating UML diagrams and the yumlcmd Ruby gem (add to your gem source and then gem install yumlcmd). Thanks to Under the Hat for pointing these tools out - check their blog for directions.

Although YUML hardly replaces OmniGraffle, it is cool to have documentation text based (Latex files and YUML files): faster, and less work.