How much documentation should be written?

Remember documentation is just one medium of communication and not the product itself. i.e. it is merely a means to the end and not the end in itself.

That said there is no denying that we will need to produce various documents throughout the project in order to communicate. Make sure that each document that is created goes through the sanity check of

1. -          Is this the best medium of communication?
2. -          Can this be maintained?
3. -          What is the cost vs. benefit of creating the document?

Once you agreed on the need to document, please remember, Microsoft Word is not the only medium of documentation. Evaluate all possible alternatives

1. -          Models
2. -          Add to code comments and generate documentation using tools like Ndoc
3. -          Create executable test, or manual test cases

Further reading:

http://www.agilemodeling.com/essays/agileDocumentation.htm