I have been using Sandcastle internally for years at Microsoft. It has helped automate API documentation for internal tool frameworks, helped the test teams I have worked with understand things a bit better, and required me to comment my code a little better than I would naturally be inclined to do. I always ran it as part of my build script, so docs were always up to date, which is very helpful when you write an SDK.
Rob Caron points out that a CTP is now available. He also points the way to the Sandcastle blog.