I'm seeing a lot of indy published authors recommending Draft2Digital as the way to go for formatting and distributing e-books. Here's what the site has to say about their services in a nutshell:
"Here's the deal: There are no fees for formatting or distributing your book. When you sell a book, we both make money. We keep about 10% of the retail price. We don’t try to upsell you to some expensive services package or nickel-and-dime you for making changes to your e-book. You can list your ebook at whatever price makes you happy. It’s your call. You can even offer your book for free."
I like that they have a page here that breaks down what you have to do to get your e-book rolling with them. It seems very simple and easy to do. They handle all the formatting, which in my POV is the hugest headache. They also place your e-book with what appears to be all the popular online vendors, give you an ISSN for free, generate monthly sales reports and make paperback editions available via CreateSpace (and this is one of the deal-breaker options I would have to have if I went indy; I want to see my work in print as well as electronic format.)
That they charge "about 10% of the retail price" is the only flag for me. I don't like the slight vagueness there, so if you do want to try them, be sure to get a real figure of what they "keep."