(Note that in today's world, where an increasing number of markets will allow electronic submission, these rules may be relaxed or even changed completely. Always check the submission guidelines of a market or publishing house before you submit to them. Also, these are novel formatting instructions, not short story formatting instructions, which are similar but different.)
Formatting Your Manuscript.
1. On the first page of your manuscript, please give the name of your project (underlined), skip two lines, and then provide your name and contact information, and the number of words in your work. Number of words is somewhat approximate, but try to stay within a hundred. Editors know. The submission rules mean that many of them can glance at a page and tell you how many words are on it. Deeply spooky. Do not screw with the editors. All this information should be tidily centered.
2. Most of us compose on computers these days. Computers have a lot more fonts than typewriters do...and you should forget about them as completely as you can. Set your font size to 12, select a basic font, and go to town. People will recommend both Courier and Times New Roman. Courier has the advantage of being monospace (every character is exactly as wide as every other character); Times New Roman, on the other hand, is so generic that it's rapidly becoming invisible. You want your manuscript to be invisible. Invisible manuscripts make for visible stories.
3. If you want something to be italicized in your final manuscript, use underlining. Seriously. You are not allowed to use any tricks your computer can do that your typewriter can't. If you want to be like Stephen King and make your readers crazy with little handwritten notes and such inside the text, become famous and talk to your editor.
4. Minimize non-essential emphasis. Titles will still be emphasized; depending on your genre, thoughts may be emphasized. But try to really consider how much underlining you have on a page, and keep it low.
5. Many rules of punctuation have become excitingly optional on the Internet. They are not optional in your manuscripts. Always put two spaces after any sentence-ending punctuation. Optional on the Internet? Yes. I don't care.
6. Begin the first chapter of your actual manuscript on line number eight.
7. Insert a hard page break at the end of every chapter. Begin the next chapter on line eight of the next page.
8. Signal intentional line breaks with either '#' or '*' alone on a line. The jury's out on whether this character should be centered or flush left. It's kinda up to you.
9. If you are printing your manuscript for submission, rather than submitting electronically, use only plain white non-erasable paper. You can get this at any office supply store. Better quality paper is always, well, better. Only print black-on-white. That's the easiest for people to read, and it's what's expected of you. Printing on weird paper doesn't make it more likely that you'll get published, sad to say.
10. Whether you're printing at home or submitting electronically, be sure to leave margins of at least one inch around all four edges of the page. This allows for taking notes, and makes it easier for people to read quickly.
11. Always double-space. If you're anything like me, this is going to look super-weird, at least at first. And yes, you'll kill a few more trees, but that's the way it works. You need to leave room for people to make notes on your document. Don't space-and-a-half, don't triple-space. Double-space.
12. Do not print double-sided.
There are a lot of other little tricks, opinions, and personal formatting touches that people use, but on the whole, 'black on white, double-spaced, underline instead of italics, leave plenty of space in the margins' is going to give you a really good start. There are entire books on the subject. Read one before you submit a book. You'll be glad.