Not sure if anyone's posted this tutorial yet. I've found his steps easy to follow and, with visual prompts of each step, very hard to make a mistake. It's much easier and "cleaner" in look to the Smashwords Style Guide and will convert to several forms easily. He uses MS Word 2007, but MS Word 2003 and 2010 can also be used with this step-by-step method.
I'm sure the method can be adapted for later versions of Word, but if you need visual prompts to learn? It may be a bit tricky but it is do-able.