It seems that the usual way is to create the epub file first and send it off to smashwords. Then strip out the smashword edition paragraphs and run it through Kindlegen. That way you get both old and new Amazon formats and your epub all tied up in one file. Of course then you probably want to run that file through kindlstrip (see mobi forum) to take it apart into its separate parts
Of course it isn't quite that simple, as good looking epub files and Amazon's requirements are sometimes conflicting. But it's not too difficult to sort out.