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Hello MT,
I picked it up pretty quick and found a solution that seems to work great... for me, anyways.
If you're writing in MS Word, save the work as a "Filtered Web Page". Open that saved page in Mobipocket Creator (a free program), type in the stuff like title and what-not (it's self-explanatory in there), and then click "Build". The .prc file created by Mobipocket uploads for Kindle well.
The basic .doc file, as long as it's formatted properly, can be sent directly to Smashwords. For the Smashwords .doc file, I use a Normal template (no special styles or anything like that): 12 pt Times New Roman, .5 first line indents, 1.5 line spacing, and all auto-correct/auto-format options turned OFF. The easiest way to set that up is to go into the Format>Styles (or style gallery, wherever it is in your version) and setup a "Normal" style with these options--or create a blank document with these parameters and save it as a template. Using that, I've had no issues with Smashwords.
Best of luck, amigo!
PS: I just noted this is a month old... duh.
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