You can get the Smashwords formatting guide free on the site or from Amazon. But here’s a distilled version of those great guidelines. Keeping these basics in mind has helped me get more than twenty distinct titles to work over there.
They recently upgraded to be able to handle 10 meg documents instead of the original 5 meg limit
You can direct-upload epubs (More about that in a minute) which bypass the Meatgrinder and just have to pass a validation check. (more about that later, too).
Their customer service responds much faster than formerly and is very helpful)
Do all your formatting through two menus: Styles and Formatting/Paragraph. Set up paragraph indents, text orientation (left, center, or right), line spacing, and any extra spaces between lines that are recurring. You won’t need tabs, spacebar hits, and you can make page breaks, start chapters mid-page, and other “normal book” features.
You cannot, however, do running heads or footers, or page numbers. Those are not applicable to ebooks, anyway. You can set up page sizes and margins around the text through the page setup menu. Different ereaders will resize text and pages dimensions, but your margins should remain and your text will resize and flow to fit the viewer page.
Stick to a limited number of different fonts and type sizes. Times New Roman, Garamond, and Ariel are all safe. 16 pt to 10 pt is a safe size range.
Make charts, tables, or other graphics separately and insert them as jpeg images, inline, so that they show up correctly at 100% of the size you inserted. If you try to resize them Smashwords meatgrinder likely will get the size wrong. Beware of putting many graphics in the file, though or it will go over the 10 gig limit. Making files into epubs shrinks the size somewhat.
Calibre is a free program that comverts to epubs but I have had Calibre epubs fail the validation check at Smashwords. I even had some experienced HTML people check my files and they said Smashwords was listing error they couldn’t find. There are other free epub converting programs. I have not investigated most of them.
Concerning epubs, I use a program called Atlantis, which is very similar to Microsoft Word, costs $35, and has an automatic epub converter. Just choose “save special” and fill out the metadata form. The program includes a validation step, and I haven’t had one of the epub files fail at Smashwords yet. The epubs it creates are larger size than Calibre, but if Calibre files are rejected, you haven’t gained anything.
You cannot use an auto-table of contents generator to create your linked Table of Contents. You need to bookmark each chapter title, or other element you want linked to the TOC, and then create hyperlinks from the TOC to the chapter title or element. It’s also a good idea to link back to the TOC, using the bookmark/hyperlink settings. This same system allows you to put as many back-and forth links into you text as you wish, so that you can make source credits, appendixes, and any kind of links you wish.
Others who have experience with Smashwords, please tell me what I missed.