The advantages of using a wiki(pedia) for documentation...
Speed: Wikis are minimalist web pages containing mostly plain text (usually). They load quickly.
Search: Users can perform site-wide searches, which is akin to sifting through multiple Word documents in one shot, quickly, and without having to open them.
Structure: Wikis are made up of directories, which can contain children directories that contain grandchildren directories. Upon demand, the wiki can generate a genealogy tree for easy navigation.
Archiving: Everything--modifications, old versions, new versions, users who made the changes, timestamps--is documented. It's possible to revert to an older version with a single click regardless of the damage done to the current version (unless the page itself is deleted, perhaps, in which case its history is probably also deleted).
Collaboration: Users can be individually authorized for viewing, editing, and moderating different sections of the wiki. Editing a page is not unlike editing a Word document--the interface is simple and intuitive for basic tasks.
Feedback: Polls, ratings, notifications, and other extensions are available on demand.
These are points I might have to present to the pharmacy department sometime this summer. We currently use a document library to keep track of department guidelines and procedures. It's a web directory that authorized pharmacists upload Word documents and pdf files to. The library worked well and fit very nicely into our existing web interface, but, as the directory got larger, the loading time got longer. Dr. Stevenson, Director of Pharmacy, brought up wikis during a manager meeting. It was a good idea, so I began my research. We started out with three potential platforms: MediaWiki (open source), SharePoint (Microsoft), and Confluence (Atlassian, an Australian software company you probably haven't heard of). Within MCIT-Rx, we decided that MediaWiki was too rough, the user interface too hostile for non-technical audiences. So it was SharePoint or Confluence. Even though the hospital had a tight relationship with Microsoft, we didn't choose SharePoint because it was unnecessarily complicated. (SharePoint came as a package in which the wiki was only one small component.) And we were left with Confluence.
As wonderful as Confluence is, there are drawbacks. There is no way to integrate it seamlessly into the internal pharmacy website so, for pharmacists, getting to the wiki will require an extra log-in step. Also, we don't have our own Confluence. The Medical School does. Technically, we will be using their service. While they are very friendly people, it's still inconvenient for us because we don't have control over the backbone. That becomes an issue during downtimes, etc.
Those are my research. Ultimately, whether a wiki is worth pursuing will be determined by the pharmacy department.