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Font, font size, margins, and paragraph spacing are all over ridden by the Nook. There is a check box in the text screen that says something like "Use publisher defaults". Check that and you should have the book display using the changes in your conversion settings.
Also, the Nook STR only has a limited set of fonts. Setting a font that the Nook does not support means the Nook will fall back to another font of it's choosing.
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