We want to move from MS Word to a web-based tool for our release notes.
What software do you use? Ideally, we want to use the same tool to track bugs and generate the Release Notes.
It depends on whether you ship the software.
For company-internal software, a Wiki works fine. MediaWiki is free; Confluence requires a license fee but is popular. Atlassian, the maker of Confluence, also makes Jira, a popular bug tracking tool. Jira requires a license fee too. You can query Jira, stuff the results into a Confluence page, and then edit the results.
If you ship your software (or make it available for download), you may need to package the release notes in something more portable than a Wiki page. Consider Google Docs because it's great for collaborative editing. As far as I know, Google does not publish their own bug-tracking tool, but there are probably other bug-tracking tools that integrate with Google Docs. Once your release notes are ready, you can export them to a PDF or whatever.
I would recommend a Wiki.
This would allow you and your team to collaboratively update the release notes and also maintain versioning (a very important feature when you look back after something went wrong!)
Couple of free options;
Both can contain links to your other tools but if you want full integration it often comes at a cost like;
In my office we take advantage of the integration made available by the Atlassian Suite
We use MS TFS for tracking bugs and enhancements then we query the repository through the TFS APIs and write the content on MS Word template.
Edit: there are more ways for querying the TFS database, the simplest is creating a new TFS report with your preferred layout and execute it on a regular basis. The report outcome can be exported in several formats, included Word, and you can attach it to your release or publish it in your company/product website.
The final result looks really nice and professional and it is totally automated without the need of manual editing.
Just take care of filling accurately the bugs database with all of the required information.
We use Jira-Confluence.
We also used it at my last job.
At my current job we initially only has Jira (Bug Tracking) and were using evernote (shudder) for documentation.
I had the pleasure of recommending Confluence.
Because we were already an Atlassian customer it was a snap to add it and we were using it a coupler of hours later.