I have experience with three different tools for creating style guides:
The first style guide I implemented was built using Confluence. Rather, it was a library of design templates, containing templates and best practices for the most common user interface design issues. Each model contained a sample image, a description of how it worked and why it should be used, as well as associated design files. It was mainly used by designers, developers did not find it useful as there were no code examples on how to implement them.
WordPress blog with Pea.rs theme
At one point, we evaluated pea.rs, an open source WordPress theme that makes the WordPress blog a template library tool. Developers liked it a bit because it uses CSS and HTML for sample templates that developers can use in code. However, it didn't support the use of Twitter Bootstrap in the non jQuery examples, and the designer didn't like it because it was missing some key features it would need like downloading files for the design
We are now using Patternry, a hosted style guide tool. What we particularly like is the ability to use Twitter Bootstrap in the template examples, the ability to customize the template templates and the live editor for markup and styles, this which makes it easier to mock up designs in the browser. What we don't like is that the product is still a bit immature, some features don't work as expected, there is no version control and it doesn't integrates with no external version control system.