Microsoft has an add-in for Word (2000 and 2002) that will allow you to create a .lit file from any MS Word file with just the press of a button. It even allows you to to add a 'cover' page image.
I have used it for a couple of reports and a friend is going to use it to self publish a book.
Just a tip: the RMR addin also makes the .lit file bigger than it needs to be - it doesn't seem to filter out all the extra Office tags before constructing the xhtml for the book.