If you upload pure word docs, the Amazon parser will insert/delete tabs at random and trash the professional look of your book. Despite what they claim, they no longer handle DOC files. Neither can they find the pictures if you point to the working HTML. Here's what you need to do instead:
1. format as before in Word, similar to Smashwords but with page breaks for each chapter.
2. add the HTML table of contents at the top
3. compress all images to web size -- this will raise your royalty on every purchase!
4. save the Word file off someplace safe -- mybookPubv1.doc
5. save As filtered web file (same name as above)
6. scan over the result to make sure there are no extra spaces between sections/chapters, repeat till good.
7. exit Word
8. open 7zip application. set format to zip compression
9. click on mybookPubv1.htm, control click mybookPubv1_file folder (with the pictures), and drag both into 7zip window.
10. save as mybookPubv1.zip
11. upload this file to Amazon as the book content.
12. download the mobi to your PC and use the kindle fire simulator that Amazon supplies.
If you don't have pictures, just the HTML file will work.
In one hour, I reformatted all 6 of my books, and they look a lot nicer!