In my opinion, the best way to do it, is to send it to Microsoft Word and layout it there.
Then make either a html-->ePub version or PDF correctly sized for your ereader.
In the Options you have the possibility to turn off that he highlights words not in the dictionary, or unknown words. play around a little with these settings.
I usually make a pagebreak before each chapter, but that depends on the book. Sometimes i try to make the ebook look similar as the wooden one, if it has a nice layout.
i have made a screenshot, it's in german language, but you will know what do check/uncheck. With these settings you get the best results, when exporting to Word:
