Ding Dong.... Chiming in. I'm pretty partial to keeping "short stories" whole, myself. The trick is, as noted, keeping them arranged properly. Formatting issues suck. My workaround has generally developed out to be WordPad when using Windows. Notepad on steriods, really. The HTML trick is also very workable, but you do have to be careful. For folks looking to try that route without having to get FP or some such, I recommend "arachnophilia" (http://www.arachnoid.com/arachnophilia/). And this despite the, um, rather extreme views of it's author in comparison to mine. lol. It's free, and really easy to use.

thou and I, my friend, can, in the most flunkey world, make, each of us, one non-flunkey, one hero, if we like: that will be two heroes to begin with. (Carlyle)