I use ModelRight to create the ERD. More importantly, ModelRight has the ability to generate DDL SQL for *every* feature of the model, from tables to relationships to indexes to fields...either creating or altering.
When coupled with Redgate's SQL Compare it makes database changes painless since I can modify the development model and when that's been tested migrate it automatically to QA and from there production, and I don't have to manually write any script at all! NONE. As a solo IT person that scripting feature is critical to being able to do my job at all.
The more I use ModelRight the more attached I get to it.
The takeaway here is I use the ERD to *drive* development, not just to document it. That way the documentation never gets out of sync with the development database.
An ERD tool also lets you set up custom "domains" (user defined data types) that keep fields consistent between tables. The best part? This particular tool actually does on the fly translation between domains and raw SQL data types. Basically a domain becomes a collection of datatype, default, null/not null, identity seed, etc. That's *huge*, from a productivity and reliability standpoint.
Oh, and you can customize automatic naming of things like indexes and relationships, another huge time-saver that automates consistency.
ModelRight also supports multiple workspaces that allow me to create mini-ERDs, a lot like a CAD tool lets you create different perspective views. As a communication tool it's exceptional, especially when you can use a second screen to display the view to an audience.
It's not exactly cheap ($600 for the SQL Server version) but it's one of the best tools I ever bought. Well, that and Redgate's SQL Server Tool Belt (their bundle of development tools). Honestly, with SSMS, ModelRight, Redgate's tools and Subversion it's like having two more developers on staff.
If you don't currently use an ERD tool and an ERD-driven development model you really should look into it.