I think literate coffeescript might be a better example of popularizing literate programming:

http://ashkenas.com/literate-coffeescript/

There also seems to be some traction for literate Haskell:

http://www.haskell.org/haskellwiki/Literate_programming

I experimented a bit with literate programming on an introductory course in programming using java. It's an interesting experience -- it's very easy to produce a very readable language that is still pretty poor java code, as it becomes so easy to split out fragments and "procedures", rather than follow the more common java class-oriented object orientated way of doing things.

Not really, I never heard of docco and am yet to see a RFP for a node.js project from my employer's enterprise customers.

Chances are much higher that you've seen the output of Docco or one of the multitude of imitations for other languages.