How do you generate release notes?

If you are using maven, there is a the maven changes plugin for this purpose and producing this report could thus be easily automated in an continuous integration process.

If you use JIRA (which I'd suggest any way), it can auto-generate the release notes for you. The built-in format is rather simplistic, but works well in many cases. The content is customizable to a point, albeit this is not the ultimate word in terms of flexibility.

If you look for better release notes from JIRA, try the PDF View Plugin. It:

• more than just a raw "completed issues" list (ex: installation and upgrade instructions, legal details, executed tests, changed files)
• more control over what is included (excluding certain statuses, resolutions, issue types, etc.)
• allows distributing your Release Notes document in email (PDF format) or printed on paper

Disclaimer: I'm a a developer of this commercial JIRA add-on.

Generally this sort of thing is done by issue tracking software. You track every new feature, every bugfix and every enhancement, assign them to a release and then generate release notes from the descriptions.