Creating an ebook out of a text or HTML file is incredibly easy a program called Sigil. (If you're starting with a Word .doc file, or some other word processing file, first make the intermediate step of saving it to HTML or text. Saving as HTML lets you preserve italics and some other formatting.) Just open your HTML or text file in Sigil and save. Ta-da! We recorded the screencast below to show you how easy it is.
For full-screen display, click the expander button in the video's lower right corner. To return to the smaller view, press the Escape key.