Here are some guidelines for formatting your short story or novel manuscript before submitting it to a freelance editor, a formatter, a contest, an agent, a magazine, or a publisher.
Also, check out these three excellent blog posts on formatting, by others in the biz:
5 Book Formatting Mistakes to Avoid, by Chandler Bolt:
First Steps in Formatting for Print by fiction editor Beth Hill.
Using Font Styles When Formatting for Print by Fiction Editor Beth Hill