I think MS Word and Open Office would be the obvious candidates. MS Word pretty much dominates the market. Open Office is there for people who just want to rebel against Microsoft.
I'd need a very good reason to use anything else, as to function in a Western business, government, or academic environment these days you pretty much have to use MS Word at some point. Why bother learning something else in addition unless it offers specific advantages?
MS Word allows you to create "styles" that you can use to distinguish your main text from special types of text, like block quotes or examples or, as in your case, code snippets. People do this all the time: I did it myself for my database book. I think your time would be far better spent learning how to do this in MS Word than searching for some alternative word processing software that might possibly make it easier to do it. If you're smart enough to write a technical reference manual, you should be able to learn how to do this in MS Word in, what, half an hour? An hour? :-)
Personally I think Word's handling of embedded images is rather awkward and clumsy. But it works, and the idea of learning a whole new word processor, and having to convert files back and forth any time I want to share them with others, doesn't seem worth the effort to me. Maybe if I was creating a document with many images that had to be laid out in complex ways, I'd start searching for something else.