Smashwords is so frustrating.
On the one hand, it lets me reach Kobo and Sony, which I just wouldn't have access to without a middle man. Their coupon system makes it easy for me to do promotions and giveaways. And their royalty sharing is very fair.
But their formatting ... the Meatgrinder software has earned a special place in one of the deeper circles of hell, as far as I'm concerned. I have no idea how they thought it was acceptable to throw out eBooks that don't even have chapter breaks, but that's what they do.
And their insistence of calling everything the "Smashwords edition" and inserting a special "Smashwords license note" and refusing to acknowledge the existence of Amazon just seems ... petty. Understandable, but unprofessional.
So, yeah, even though I get a higher royalty from Smashwords, I direct my readers to Amazon or B&N first, because they sell a nicer looking product, which makes my writing look more professional. Or at the very least, detracts from it less.