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 http://gemcutter.org 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.