Wikis can be a valuable resource for software development teams but they are not a silver bullet. It is all too easy to create a Wiki that would rapidly fall into disuse or become grossly outdated.
In my opinion, the key to a successful Wiki is getting the entire team on board. That means getting people away from other resources (and in particular email archives) as knowledge repositories, and offering some incentive for people to contribute.
However, it's also important to not be a format czar: If you have a lot of documents that you generate in, say, MS WORD, it may be ideal to do them all in Wiki format but that takes time and may be annoying if you have diagrams, documents, etc. In those cases, it's better to compromise and let people keep it in word format, as long as the only way to access the newest version is through the Wiki.
If you're not a manager, you need to get a manager on board because it would require some "enforcement".
There has been accumulating research and experience on Wikis and their use in software engineering. You can search the ACM digital library, for example. I am a coorganizer of an annual workshop on wikis for SE and we had several interesting experience reports and there are additional materials in the international symposium on Wikis.
