Thanks everyone! Happy to report that chapter detection is working. Manichean, thanks for the suggestions to save as filtered web page. That seems to have done the trick!
Since I have a LARGE quantity of files to convert with Word origins, it would be too time consuming to hand edit the tags for each chapter of every file. But you're right, Word makes a mess of it.
Does anyone have a different recommendation for converting text to mobi? My project is that I'm organizing stories for my creative writing group, copy/pasting from our internet pages and then creating mobi's. Currently i paste to Word, save as web page, run the zip through Calibre.
TheDucks - sorry, but you lost me.
I'm not that savvy with the lingo.
Thanks again everyone!