I'll have to stop thinking in terms of making a Kindle book and think of it as a digital book, or even a Smashwords book. I've been reading the free Smashwords guide, and I'm impressed. Of course, Amazon and Kindle are a tremendous marketplace – you'd be insane not to publish there – but Smashwords says they are growing, and they provide an amazing service.
You upload your Word file, they "smash" it through their affectionately-termed Meatgrinder, and it comes out in multiple digital formats. Unless you do something very wrong, in which case it comes out, as they say, hamburger. But they have a handy mistake-finder in the system which tells you what you need to correct. I haven't gotten that far by a long-shot, but it sounds pretty wonderful after my first experiments last year with another conversion software on a different still-unfinished project. I had no idea how to fix the things that were going wrong.
If you take care with your book and it comes out looking reasonably professional, Smashwords will even distribute it through their catalog to numerous sellers of digital books, including some big names. You can still take your original Word file and upload it to Amazon as well. Oh, there is just so much to learn! The whole thing is making me a little nervous daunted, but I've taken a few more steps today.
They tell you what to do and what not to do in Word, the best software for your manuscript. So I turned on the "reveal formatting" feature (see above) and fixed some no-no's.
I still have a few things to learn about preparing the text before I move on with the photos. But so far, so good. If you're thinking of putting together a digital book, do check out the Smashwords Style Guide.