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The wizard he talked about is the little box at the far right (with a wand in the box) after you click on Generate ToC from XPath. I gave you the actual string you can use, though, so you don't have to click on the wand.
After you entered ## (not "xx" as stated by Divingduck) above each chapter heading, did you save the .txt file, then drag the .txt file into Calibre, and then convert it to .epub (with markdown chosen, as I said above)? This will work to have the conversion process create a separate html file for each chapter or each section where you have ## at the top of each section. So, you must have done something wrong. Please read my instructions again, because it works.
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