Recently I have heard about generating Sequence Diagram in Visual Studio 2010. I just tried in my project, it was really amazing and very simple to draw the sequence diagram through this new version.
For eg:- You will be having lots of methods in your project, just right click any of the method and click "Generate Sequence Diagram" utility, it will ask you to select certain properties like how much indepth you want to draw & etc.
Select those option and click Ok button, your sequence diagram is ready now.
Pretty Cool Stuff in Visual Studio 2010 Ultimate.
Keep implementing and reduce your documentation work.