The think I really like about using a Wiki for documentation is that it is really really easy to link up pages to each other. Just put in the [] and you are done. Plus it keeps track of what pages link to each other - which comes in extremely handle if you do a little planning and structure it right.
I agree with you on the formatting... I'd love the HTML widget or at least the abilty to type in some HTML. Or to be able to enclose soemthing in [] but also determine what the HTML anchor is (wikipedia has this).
I've been told then it would no longer be "wiki-like" :) But I contend the wiki with the HTML widget, combined with [] would be killer.
