Hi Richard, when I first started Smashwords 3 yrs ago, I posted a survey over at LinkedIn where I asked book authors what word processor they preferred using. At the time, 95% of them answered MS Word, which is why it made sense to build Meatgrinder and the Style Guide around it. To date, the decision has worked quite well for us and our authors, despite the non-stop ridicule we receive from people who find it absurd we'd build a publishing platform around Word. But then, many found the entire notion of Smashwords absurd, so thank you very much, I guess I like absurb.
This survey represents my attempt to do a reality check and get a feel for how things have changed in the last three years. Thanks to everyone who has already provided great insight!