Over at http://pdxnat.wordpress.com/2011/10/...pub-mobi-file/
I wrote up a simple tutorial for converting a "word" doc to epub / mobi using Calibre.
It's based on setting the document title & chapter headers to "Header 1", save as "html", ask Calibre to "Remove spacing between paragraphs" and set the "Level 1 TOC (XPath expression)" to "//h:h1".
This won't satisfy everyone's particular needs, but I think it's a helpful tutorial for folks just looking to convert a simple document into eReader format.
Hope this helps someone.