Jan, I encourage you to give Smashwords a try. Authors who make the effort to carefully format their books to our
Smashwords Style Guide get good results. Authors who ignore the Guide because they think they know better get hamburger out the other end, as J. Wolf discovered.
There are definitely both advantages and disadvantages to an automated system such as Smashwords. The advantage is simplicity, zero cost, rapid publishing, robust metadata control and powerful selling tools, and the disadvantage is some loss of control over formatting, especially for technically savvy authors who can code in HTML and require greater control over layout. Many of the disadvantages can be overcome by following the Style Guide, which we have continually improved over the last two years, as we have continually improved the Meatgrinder.
Authors who format their books to the Style Guide gain inclusion in our Premium Catalog, which is what we distribute to Apple, Sony, B&N, Kobo, Stanza, Aldiko and others to be announced soon.
With all due respect to Mr. Ploppy, folks who believe ebook publishing starts by converting a file with Calibre (a great application, btw) and ends by plopping it on their personal website have no use for Smashwords. Such authors, which I would argue constitute a small minority, are also doing themselves a disservice because they're unlikely to connect with as many readers as those who take full advantage of the myriad distribution opportunities now available to indie authors. Smashwords takes 15% of the net sales as a commission, which works out to about 7.5-10% of the digital list price. It's not much. A retailer takes anywhere from 30-50% of your list price. If such an intermediary can help an author connect with readers they would never have otherwise connected with, then it's a no-brainer to work with distributors and retailers. Of course, I'm biased.