For an example file for layout please click here... https://www.mediafire.com/?pzldcehsbcwhdzx
They have a long list of things that the author needs to do and you will sometimes see AutoVetter errors. The most common AutoVetter error is not having *Smashwords Edition* in the copyright part... simple I know!
So here is how I prepare a document for uploading to Smashwords.
[NOTE - I use the same file to create my Kindle, ePub and PDF files in Calibre]
Make sure you use H1 and Normal as you write.
Normal is what your main writing will be. You can set the attributes of Normal very simply. Get a paragraph looking how you want it to, with the right font, font size, indents, line spacing and paragraph sizing then simply highlight a row of writing and right click on Normal and you will see the selection 'Update Normal to match selection'.
Each chapter heading should be made H1. This is used by Smashwords to indicate a new page in your book.
Create a Contents Page
WARNING - do not use Word tools to auto create this. You must do the following:
Create a bookmark just before the word Chapter on each of your chapter headings
Type a list on your contents page of your chapters
WARNING - make sure you have a space after the chapter number, this stops strange code appearing in your converted files.
Use Hyperlinks to link each of these to the correct chapter bookmarks.
A useful video of how to do this in Word 2010 is here: http://www.youtube.com/watch?v=oNPGVgwGnN4
No fancy writing, no images, nothing, just the following:  indicates font format of the line
Title of book [H1]
Series Name [Normal]
Smashwords Edition [Normal]
Edition XX Copyright 20XX Author Name [Normal]
Previous Edition details Copyright 20XX Author Name [Normal]
Cover Art - Artist Name [Normal]
Editing - Editors Name
So for example:
Copyright 2012 by RJ Scott
This edition May 2013
Cover design by BitterGrace Art
Edited by Editors Name
Do not mix
Indents on line one in paragraphs AND setting spaces before and after paragraphs are not accepted by Smashwords.
I am not saying this is a definitive way BUT it works for me and I have all my books in the Smashwords Premium catalogue feeding to B&N, Kobo, Apple etc.