Mark Coker just announced this over on the Smashwords blog:
Smashwords authors can now add enhanced navigation to their ebooks with linked, clickable ToCs.
This is good news for our 4,992 authors (we should reach 5,000+ by tonight or tomorrow!) and their 10,943 books.
The lack of live ToC support has been one of the biggest, most glaring holes at Smashwords ever since we launched two years ago.
For fiction, it was a tolerable omission for most readers because people read fiction serially, from word one forward. For our non-fiction authors, it was more problematic because readers interact differently with non-fiction. For some non fiction, navigation is essential to the reading experience.
The newly updated Smashwords Style Guide, which now sports a sporty ToC of its own, went live this afternoon with step by step instructions.

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