We actually used Confluence but moved away from it. The interface was difficult to use, it was slow, the search wasn't great, etc.

Confluence is still the best Wiki out there for general documentation itself, in my opinion. It takes work though to create the initial structure with a realistic view of how projects will evolve, and to make sure that everything is reachable through an organized hierarchy (or lattice, or DAG) reachable from the Space root. What sucks is random "floating" pages not tied to anything else -- these get lost.

There are various orthogonal concerns to deal with when documenting software development with Confluence:

+ knowing the underlying platforms / technologies your project uses

+ architecture / design of system (which will evolve over releases) -- Gliffy plugin works well for illustrations

+ documenting releases

+ engineering-level precursors to user documentation

+ meetings -- high-level overview of discussions, decisions, resulting actions

+ Confluence wiki integration with bug-tracker, source code repositories

Without an up-front design one will run into problems. Even worse if managing several projects.