One thing I picked up when working totally outside the embedded world was to make a folder with datasheets for every component in the system. This is fairly simple (you need the datsheets to design) and saves a bunch of time during debugging.

As for actual documentation:
C is not self documenting. The amazing thing is that if you structure your program right and comment it right you have all documentation needed except for the schematic. I can not emphasize enough that if a program require documentation outside the code it is not structured!

Erik