This week's book giveaway is in the OCPJP forum. We're giving away four copies of OCA/OCP Java SE 7 Programmer I & II Study Guide and have Kathy Sierra & Bert Bates on-line! See this thread for details.
There are many diagramming software which will help to draw class diagram, however I use Visio 2010 to draw UML and other diagram. Visio 2010 can create class diagram by reverse engineering. I will recommend you to try it out with the free trial version available for evaluation purpose.