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The ePub standard includes a toc.ncx file where the TOC is specified. So far as I know, all ePub readers support toc.ncx and it really is the best way to do an ePub TOC. The exception is if the headings include any non-Latin characters, because badly implemented ePub Readers (and in particular Adobe Digital Editions, as used on most E Ink devices) use a system font for the TOC with poor glyph coverage.
An in-line TOC, i.e. a set of hyperlinks in the body of the text, is better than nothing, but inferior to a real TOC. I agree that in-line TOCs are quite common as are ePubs with no usable TOC of any kind.
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