We use a Wiki (
TWiki) as a clearinghouse for all our information. We've got diagrams of how the servers are configured in the firewall (what ports get redirected to which server), instructions on how to set up a developer workstation starting with bare WinXP, a list of common problems and their solutions, a dictionary of terms and abbreviations particular to our workplace and standard operating procedures for the person "on call", just to give you an idea of some of the things we document.
Then in the root directory of every project I create (I have a few dozen) there's a README file which details the project-specific details regarding how to build and deploy the project. The build usually starts with a batch file to set up the environment (rather than depending on the developer to set up the environment themselves) and
Ant to do the work of building and deploying. That way when one checks the code out of source control (you do use source control, right?) he doesn't have to rely on trial and error to get the thing to run.