Yes, it's important to write a good story. Yes, it's important to stand out of piles and piles of slush that agents and editors read every day. But you want to stand out for your writing, not your abysmal formatting.
When I first started writing, I spent hours pouring over websites like Harold Underdown (awesome if you're just getting started) and Verla Kay's message board (affectionately nicknamed "the blueboard") just to make sure I was typing in the right font and double spacing. The very first thing I did as a wannabe writer was take Mr. Underdown's book THE COMPLETE IDIOT'S GUIDE TO PUBLISHING CHILDREN'S BOOK out of the library.
But no one ever told me that you need to format your MS in a special manner for e-readers. No it doesn't look any different on your computer screen. But unless you set up your document in a certain way, it looks all wonky on the Kindle. Or Nook. And you know all the agents are reading on the Kindle now, right?
Anyway, my fabulous agent (I'm not too biased, am I?) put together this great post walking through the process to set up your MS so it will read well on an e-reader.
Vickie's tips on formatting your MS for e-readers
I did this after she signed me--and am horrified how many people probably read my MS all weird with funky spaces and stuff.
But I would strongly encourage everyone go do it NOW!
UPDATE: OK don't panic! Apparently, it's not terribly wonky! (thanks, Laura!) So don't worry if you've already sent out MSs without this format.
Very soon, a group of us are starting a new twitter game. Stay tuned for details from Heather Kelly of Edited to Within an Inch of m Life. Everyone is welcome to join in!