I still use Smashwords for most of my books, but I also use Draft2Digital. Thus far, I like both of them. If you don't mind learning the style guide for Smashwords, then I don't really find them specifically hard to work with. Lately, I've had pretty good customer service with Smashwords, too. So I still plan to use use Smashwords for a while, at least for my main series.
There are a few places that one distributes to but the other doesn't, but nothing too terrible, and D2D seemed to have reasonable customer service for the couple questions I had for them, as well.
The benefit of D2D is that creating a simple ebook is relatively smooth. (I say relatively, because if you're using images as chapter headers you may still run into a few issues). Then again, for both places I already was using the formatting I created for Smashwords, since it seems to clear up quite a few issues across all distributors.
That being said, I'm thinking of testing going directly through Kobo once I get a stand-alone story ready to try (while using the distributors for other retailers). I would try going direct to iBooks except for the lack of a Mac to work from.