I have a big Arc script that generates the documentation from template files. For instance, when I provide the examples, the script fills in the output. This helps ensure the examples actually work :-) The script also generates the HTML, the index, the previous and next links, etc. So most of the manual work is figuring out what everything does, figuring out the high-level organization, writing the description, and creating examples. Writing the script and templates in Arc is also an interesting way to get hands-on experience.
Documentation from the docstrings also has its place; I view my documentation as complementary. I'm hoping to end up with more high-level, conceptual documentation.
