If you are writing in a Normal style that fits the Smashwords defaults (as above), then there's no issue -- just double-click on the word you want bold/italic/underline, and click on the bold/italic/underline button, as desired.
If you are not writing in a Normal style that fits the Smashwords defaults -- and I don't blame you -- then you complete your document in your Normal, and then Save As SW[MyDocumentName]. (Or whatever name you want. The key point is that you're making a duplicate document which is going to be the one that you upload to Smashwords.)
Make sure it's not .docx. Docx is eeeeeeevil. Make sure that you typed this "cleanly," without merging in changes, using different fonts, or otherwise adding Word Cruft. (If you did that stuff, you'll very possibly need to copy it all and paste into a text-editor that will save as Text. Then you'll need to paste back into a fresh Word document and replace all your formatting by hand.)
Anyway, once you have your document that is destined for Smashwords, Select All and change the style to your previously-defined SmashwordsNormal. Hopefully this will preserve your bold/italics/underline markup. It will not preserve any other styles or Headers, but thus far it has preserved my bold/italics/underlining formatting.
However, you'll want to check. Open up the old file and have them side-by-side. In the old file, use Word's advanced Search features to search for [blank entry box], Style: Italics. Then swap over to the new file and make sure that the italics are there. It's time-consuming, yes, but once you've sampled enough of that style, you can decide whether the change has preserved it or not, and move on to the next style.
In my case, since I use the HTML markup by default, what I do is use Search to look for that markup (e.g., <b> for bold), change that HTML-marked text to bold, and when I'm done, I do a Search-and-Replace of the bold tags to blank, removing them. If I do this after I've changed my style to SMNormal, I don't have to worry if anything is de-bolded (etc.) during the style-change. It's all there, pre-marked.
...if you're asking how I use HTML markup by default, it's simple. Anything I want to make italics, I encircle with <I>italics, like this, typed by hand</I>. E.g., I'm typing along, I get to a word the character is going to stress, and I type something like:
"No!" he shouted. "I <I>won't</I> sign that contract!"
Literally! It's that simple! Press the < key (it's above the comma), the i key, and the > key to start the italic section, write what you want in italics, then close it up by typing < again, the / key, the i key, and the >. You can also type command-i (or control-i in Windows, I assume?), or go back and select the word or phrase and make it italics as well, but the HTML markup will be visible for you to Search on (and strip out afterwards), and if you paste into Dreamwidth or LJ in HTML Markup (instead of posting in RTF), it'll seamlessly turn into the italics, etc., that you want.
...I suspect I've explained it far too complexly. O:> I think you may've been over-thinking it, though. It's using raw HTML codes as search(-and-replace) markers so the human can add Word formatting (command-i, command-b, etc.) or verify that the formatting came through accurately after the style change. It is not making Word obey HTML.
(edited to fix a "styles" that I didn't mean; oops!)
If you are not writing in a Normal style that fits the Smashwords defaults -- and I don't blame you -- then you complete your document in your Normal, and then Save As SW[MyDocumentName]. (Or whatever name you want. The key point is that you're making a duplicate document which is going to be the one that you upload to Smashwords.)
Make sure it's not .docx. Docx is eeeeeeevil. Make sure that you typed this "cleanly," without merging in changes, using different fonts, or otherwise adding Word Cruft. (If you did that stuff, you'll very possibly need to copy it all and paste into a text-editor that will save as Text. Then you'll need to paste back into a fresh Word document and replace all your formatting by hand.)
Anyway, once you have your document that is destined for Smashwords, Select All and change the style to your previously-defined SmashwordsNormal. Hopefully this will preserve your bold/italics/underline markup. It will not preserve any other styles or Headers, but thus far it has preserved my bold/italics/underlining formatting.
However, you'll want to check. Open up the old file and have them side-by-side. In the old file, use Word's advanced Search features to search for [blank entry box], Style: Italics. Then swap over to the new file and make sure that the italics are there. It's time-consuming, yes, but once you've sampled enough of that style, you can decide whether the change has preserved it or not, and move on to the next style.
In my case, since I use the HTML markup by default, what I do is use Search to look for that markup (e.g., <b> for bold), change that HTML-marked text to bold, and when I'm done, I do a Search-and-Replace of the bold tags to blank, removing them. If I do this after I've changed my style to SMNormal, I don't have to worry if anything is de-bolded (etc.) during the style-change. It's all there, pre-marked.
...if you're asking how I use HTML markup by default, it's simple. Anything I want to make italics, I encircle with <I>italics, like this, typed by hand</I>. E.g., I'm typing along, I get to a word the character is going to stress, and I type something like:
"No!" he shouted. "I <I>won't</I> sign that contract!"
Literally! It's that simple! Press the < key (it's above the comma), the i key, and the > key to start the italic section, write what you want in italics, then close it up by typing < again, the / key, the i key, and the >. You can also type command-i (or control-i in Windows, I assume?), or go back and select the word or phrase and make it italics as well, but the HTML markup will be visible for you to Search on (and strip out afterwards), and if you paste into Dreamwidth or LJ in HTML Markup (instead of posting in RTF), it'll seamlessly turn into the italics, etc., that you want.
...I suspect I've explained it far too complexly. O:> I think you may've been over-thinking it, though. It's using raw HTML codes as search(-and-replace) markers so the human can add Word formatting (command-i, command-b, etc.) or verify that the formatting came through accurately after the style change. It is not making Word obey HTML.