Gregg
Read this discussion with interest.
I have one more option for you if you don't mind spending a little money. There's an product called Jutoh -
http://www.jutoh.com which may solve all your problems. The user interface is a word processor similar to Word XP or OO/LO. You just format your text as you would in MS Word including the use of styles. Its great advantage is that you can create output in many formats including one specifically for SmashWords and MOBI which requires an add-on.
There's a free trial so why not give it a go? There's even a free ebook, written by the developer, which guides you through the process of creating ebooks in the various formats.
Micki