To answer your Practical Question, I googled and asked friends and came up with these. Forrestdoc,doclet and doxygen.
The second question, I would say that yes, its not very "Web-oh-twoeye" but At least your guaranteed to work in an offline environment, and its small enough to ship along with your API. i dispise the use of frames, but then it works rather well for javadoc. I have not seen any plans to change it.
Eclipse has some support for javadoc as far as reading, interpreting and generating it goes.
