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I think the best environment is a word processor environment with all its bells and whistles and capabilities. Then either publish as epub (as AWD) or use Toxaris' add in for Word.
This assumes that styles are used and the word processor is used as such and not as a typewriter.
I think this may be less so if the document is very heavily formatted. If that is so, it may be easier (relatively) to work directly with the code. But epubs are a poor way of displaying textbooks and other similar heavily formatted documents.
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