I donated my car mainly for the warm fuzzies (plus it got rid of the car quickly). If you need the money from the sale, then sell it yourself, if the money isn't as important then use it for a trade-in. If you have the room, you can use it as a spare as suggested. I knew that I wouldn't get anywhere near what KBB (or the Old Car Price Guide) said it was worth and I didn't have the room to keep it until it did sell. Most places that accept cars as donations will do all of the paperwork (although you have to send one to the DMV saying the car is no longer your responsibility). This site gives some information on what to expect.
http://www.carcontracts.net/ will do them for a fee. Your local DVM website should have online forms that they need, including a bill of sale. In CA, for example, that would be http://www.dmv.ca.gov/forms/formsmost.htm
I find a basic contract on another site. Our DMV (Missouri) provides a Notice of Sale on their website, which is a new requirement as of Jan 1, 2006. I did learn they require a safety inspection certificate, less than 60 days old. I just had one in mid-Nov so looks like I need to get a new one before selling. Andy