Yeah, see, this is the problem I ran into with the NXE Paperback conversions. Markup languages like HTML and TeX are made to be machine processed. EPU's works are not. Getting it right consistently and entirely automatically is... not impossible but it requires a great deal of hand-holding which contradicts the "entirely automatically" bit.

Try Calibre. It typically does a good job with format conversions and at the least it gives you something that you can tweak by hand if^h^hwhen necessary.