ePub to Mobi...formatting goes out the window?

Alright, I have attached a zip containing 2 different files. The ePub is the input file and the mobi is the output. If you preview the ePub everything looks fine, but when you open the mobi...well, it looks like a bomb went off. I need to know if anyone knows how to a.) fix this so that it doesn't do it in future conversions, and b.) explain to me why it's doing it in the first place.

Please note that this conversion was done with all the "default" settings intact.

Thanks!

Attached Files

Poison Ivory (93).zip (1.18 MB)