any way you look at it and any method you choose, it still is a long journey to the perfect mobi, with a little bit of learning involved in the process (whether it is html/css or, the reason i love Open Office, regular expressions that allow you to make all changes in one go)
here's a wiki about them regular expressions if you're interested
in a nutshell, it's like the find function in Word, you find and then replace.
^$ - will take care of empty lines
^(tab space) - will take care of spaces before the first line of the paragraph
(tab space)$ - will take care of spaces at the end of the paragraph
^chapter .*$ - will find you all your chapters (as long as they have the word "chapter" in there)
^[0-9]* - will find all the numbers at the beginning of a sentence/paragraph (especially useful when you don't have the word "chapter" anywhere in there)
[a-z|;|.]$ - is a long story about repairing broken paragraphs
--as always a big thanks to tt