I use WriteWayPro to actually write the book, because of the ease of jumping around between sections, and the ability to create chapters and scenes, keep notes on plot and characters, etc., BUT when it's time to actually produce the book, I export the manuscript from WWP to Word. Most of the publishing sites (Amazon, Barnes & Noble, Smashwords) can all take a Word file as input and convert it to their reader format.
Other software that is popular for ebook creation is yWriter and Scrivener. Though I haven't yet tried it myself, I have heard rave reviews on Scrivener. It used to be a Mac only product, but they just recently released a public beta of their Windows version, which is due out in early 2011.