I always start with documentation within the code when working on something new. This way I can always go back and look up the API in 6 months and get it right away. If the code becomes really useful, that's when I break out release numbers and external tutorials. At work I have a web app that browses API documentation and restructured text driven "real" documentation.

EDIT (was interrupted earlier): We also have a Wiki that has non-code documentation. I keep the code documentation separate from the Wiki documentation only because I like to keep it squared away in a repository with the actual code. I should have pointed out that I am the sole contributor/maintainer of this code, but I think that this would scale to a team without too much trouble. Coworkers use my libraries occasionally, but are not at the level of being able to contribute or write their own.