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If I was starting out knowing what I know now, there is a good chance I would pick Scrivener - what playing with it I've done shows it to be an excellent product that is steadily getting better. That's not to say it's perfect, I haven't seen perfect yet. Whatever method you choose you will have to bend it to your will and find ways of achieving the things you want. One of the big bonuses with Scrivener is an excellent introductory tutorial, it's a great way to try it out.
But I didn't. I started with OpenOffice and moved to LibreOffice a while ago (and that's what I am still using), these are enough like Word that many of the same cautions apply. To produce good results when converting to e-book you must learn how to use styles effectively. If you are constantly adjusting headers and footers and page numbers then you are definitely not creating a document appropriate for e-books. Once you start to get it right, they are all very effective for writing e-books. It just takes time and practice.
Sigil is already mentioned, and since you speak of adjusting images it may prove to be a good choice - since there you are creating the epub directly and can see better exactly how things are coming out.
Some people write in plain text, some in html, and there are many other products mentioned in other threads on this forum. Each option has something to recommend it, and something against it.
You may get more specific help if you can be more specific about the type of book you are trying to create.
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