Yes, Michael, it is strange that Smashwords really only permits an upload of MS Word .DOC files, but actually convert those files to a whole range of formats including PDF, .mobi, ePub, etc. The nice thing about uploading first to Smashwords is they will create a .mobi file that can be uploaded to Amazon later.
The limitation is a serious disappointment, because much of what I had in mind for publishing will require photos, charts, tables and graphs. And, a PDF would be perfect for that. So, I am confused why ePublishing does not get behind the PDF format? Perhaps Kindles will not read a PDF file? This also means that inDesign is useless for generating eBooks at this time.
However, I do have quite a bit of material that will work fine in text only format, so I will start working on them and upload them as I soon as I can. The stopper for now is they require an ISDN for every book uploaded, and ISDNs cost $125 per book, so my first book will have to wait until I have $125 to pay for the ISDN. In the mean time I will work on getting the file just the way Smashwords wants it. And, once the first book is ready for upload, then I will start work on the next book, and so on. When money comes in for ISDNs, then I will upload them to Smashwords. Once I have them on Smashwords, then I can download the .mobi file for each book, and upload them to Amazon.