it sounds like you have hard line breaks in your file, particularly if you are starting from txt. since you're converting rtf, in word, click on the button to show invisible characters (it should look like a paragraph mark). if you see paragraph returns at the end of every line, that is the problem. you can do a search and replace to remove them : first, do a search and replace for two paraghraph signs in a row, and replace them with something like a tab (look in "special" for these when in the search dialogue box). if you have an empty line between paragraphs, this will preserve them. then you can search for single paragraph marks : don't put anything in the replace box, and hit "replace all". then go back and change the tabs (or whatever you used) back to double (or single, if you prefer) paragraph returns. that should fix it.
just be careful if you *don't* have a double break at the end of a real paragraph ; in that case your whole book will turn into one loooooong paragraph, and you'll have to fix it by hand.
