Be sure to use 0.8.1. It has a number of changes. Perkin has worked hard and wrote a whole new output generator for Textile. It's a drastic improvement over the old output. One major difference is the new output accounts for CSS. So bold text set by CSS will be honord. You'll also like to know that Perkin also plans to rewrite the Markdown output to make it better.
As far as using Textile in calibre, it's just like using a Markdown formatted TXT file. Take a look at
http://www.textism.com/tools/textile/ for information about the syntax. I would also recommend converting an existing book to TXT using Textile to get a feel for it.
Calibre's Textile support is very robust and advanced. We support escaped formatting ([]). For example:
Will produce:
Code:
<bold>C</bold>hapter One
Normally * needs white space:
Code:
This is a *bold test* example
But escaping get's around this. All of the inline styles _-*+ support it.
Perkin also added (not standard) & as an inline style to create drop caps output.
I've completely switched from working with Markdown to format texts to Textile because it offers a lot more control and much more flexibility. Floating around here Perkin has written about associating .text files with a particular editor. As well as provided syntax highlighting files for that editor.
Oh, one more thing since you've been away p3aul. Check out the TXTZ format. It's TXT inside of a ZIP archive with the extension changed from .zip to .txtz. If you convert to TXTZ (with either Markdown or Textile formatting) it includes all images from your input document. Be sure to use the --keep-image-references option to ensure the images are properly referenced in your output. By default it removes them. Also play with --keep-links. It works but there are a few quarks depending on how the input handles links. We would rather keep all links and possibly introduce small artifacts than break them. For a basic novel isn't really necessary to keep links.