Now that I've got a few etitles under my virtual belt, I have a few tips to share with those of you who might be considering going this route. (Of course, most of this advice also holds true for print publishers as well.)
1. Do your research. As with regular print publishers, it's important to know what the particular company is looking for and what they don't accept. Most epublishers will publish erotica for instance but only a few will accept 'sweet' or tame stories with no explicit sex. Checking out the publishers website and being on the alert for special publishing calls will ensure that you submit what the particular editors want. (Special publishing calls often have deadlines so you'll want to be quick off the mark!)
2. Do more research. Not all epublishers are created equal. Some rival small print publishers in their output and sales while one or two have very limited sales and output. In the same way, some publishers have a better reputation for dealing with both their clients and their authors than others. Google the publisher's name, troll publishing blogs, get to know the good and the bad points of any publisher you want to submit to so you can make sure you are making the right choice for you and what you want. (Some epublishers will also put out print versions of books so if that's something you'd like, get to know what the criteria are for choosing which books go to print.)
3. Be prepared to spend time on the web promoting your book and promoting yourself. This includes setting up a website or at least a blog, visiting the blogs of other writers, contributing to your publisher's blog, doing online interviews, getting yourself and your book/s listed on as many writing sites as possible, joining yahoo groups, writing articles, and participating in online discussions. Doing all of this won't guarantee that your books will be bestsellers but it sure will improve your name recognition.
4. If a publisher wants an exclusive look at your story, give it to them but put a deadline on it (a month on a full should be okay). It's my experience that epublishers generally get back to you pretty quickly and you don't want to start hemming and hawing, holding out for another publisher to get back to you, with an offer on the table. Not because the first publisher will lose interest but because there's no point in starting off any relationship like that. The lesson here probably is that you should start with your most preferred publisher and work your way down the list.
5. Stick to your editing guidelines. If the publisher gives you edits and wants them back by a certain time, either do it or let them know why you may have a trouble with the date. They're not ogres, they'll understand if you have some commitments that might make it impossible but you do need to give them some notice. It's the professional thing to do.