This from J. W. Manus, somebody definitely worth following if you want to do your own formatting. This guy knows his stuff.
Smashwords is now accepting EPUB files. This can be a step forward for anyone that thinks they can do a better job formatting than Smashwords’ Meatgrinder program.
Meatgrinder does have its drawbacks, since it’s formatting for such a variety of file types, but keep in mind that you NEED that EPUB file to pass a Validation Check.