Sphinx is mainly a tool for formatting docs written independently from the source code, as I understand it.
For generating API docs from Python docstrings, the leading tools are pdoc and pydoctor. Here's pydoctor's generated API docs for Twisted and Bazaar.
Of course, if you just want to have a look at the docstrings while you're working on stuff, there's the "pydoc" command line tool and as well as the help() function available in the interactive interpreter.
