Need to identify the best software for creating ebooks. Any suggestions or things to avoid?

I'm trying to find a reliable program with a reasonable array of features for creating ebooks. I would like to be able to create a functional table of contents, include images, and have come control over font size and style (I realize that many devices will trump my selections on font, but I'd at least like to choose the defaults for those devices that don't). Obviously freeware is great, but if there's something that's clearly better than the freeware that's modestly priced I'd certainly consider laying out some cash. I appreciate any information that anyone can provide.