Calibre will let you convert between different formats but formatting will probably be lost and the results would certainly not be sufficient for sale.
Your best bet would be something like Adobe InDesign which will let you layout your book as you want and supports direct export to epub format.
Scrivener 2.0 is rumoured to directly support export to epub, so if you're using Scrivener to write your book that may be an option in a couple of months.
If you're familiar with HTML then you could even hand-craft your books. Epub is relatively simple, just being a collection of XHTML files (one per chapter) along with a file containing TOC information and then zipped into an archive. Download a book from
epubBooks and unzip it to explore their structure.
Once you have your raw epub whichever middleman you have chosen to handle distribution should provide DRM. There are two main types; the Apple one (only works on iPads) and the Adobe one (works on pretty much every other ereader, but not iPad so far).
Since Apple have, annoyingly, denied individuals from uploading their own books you will need a middleman such as
Smashwords or
Lulu. After both Apple and the middleman have taken their cuts you will have a little more than 50% of the sale price left.
Amazon's Kindle doesn't read epubs, so you will need to use the .mobi format. I'm not familiar with any software on the Mac that will let you author the files and there are quite a lot of obscure tags in the format (it's based on HTML 4.01) so you'd be better off asking in the Amazon DTP forums.
The good news is that from June the Amazon DTP t&c will change so that you receive 70% of the sale price of your book if you set the price between $2.99 and $9.99. Some people have tried to spread FUD about Amazon themselves setting the price for your book but nothing in the new t&c supports this.
The only annoyance is that both Amazon and Apple state that you can't undercut them by selling your ebook for less elsewhere so you can't make up your losses in lower royalties from the Apple+middleman route by charging a higher price. Hopefully increased sales on the iPad will make up for it.
