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Steven pointed me toward this thread.
First of all, what Nick said about formatting for the SW style requirements. I have found the SW guide to be an excellent checklist for producing a quality ebook in various formats. Since I started my own Kindle/Pubit/SW publishing experiment a few months ago, I've taken to putting book files into SW-ready state before I do anything else with them. Then I commit the Word doc to the meatgrinder for SW, but I use Calibre to build proper ebook files for upload to Kindle and Pubit. Even if you don't use SW, you'd be wise to follow their guide for document preparation.
As for the question about donations for free books, my experience has been a little different. For about two years, I had half a dozen books up for free, with encouragement to donate. (Keep in mind, these were books that already had a publishing track record; they'd all been published in paper by Tor, and thus had reviews and a web presence, etc.) I did receive donations, some quite generous. I'd say I totaled $1-2K per year, for the two years. I still get one once in a while. But it was clear only a very small percentage of people who downloaded actually donated. There was also some payback in the form of purchases of my other ebooks.
I largely discontinued the free downloads last fall, in favor of low-priced editions through Pubit, Kindle, and SW. I'm earning a lot more through those sales than I did through donations. But again, these books already had a presence online. As to whether the tens of thousands of free downloads helped or hurt the sales of the current editions, I can only guess.
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