From here:

http://www.hackman-adams.com/articles/manuscript.htm

The Business of Writing
Manuscript Checklist

Part of the process of submitting a manuscript to an agent, editor, or publisher is to ensure the manuscript looks as professional as possible. Approximately ninety percent of all manuscripts are rejected, many of them just for the wrong manuscript format. But why should that be important? After all, you wrote a good book. Isn't that the only thing that counts?

No. Appearances do count. Just like in a job interview, you only have about ten seconds to impress the agent into looking further at your manuscript. Think a moment about what the appearance of the manuscript says about you. There is only one opportunity with this agent, editor, or publisher. Once he decides he can't use your manuscript, it's already too late.

But the manuscript's appearance is easy to correct. This checklist will help ensure that the manuscript looks its best.
Guidelines. Read the publisher's guidelines. If they have any specific requirements such as formatting of the manuscript, follow it.

[b]Paper.[/b] The manuscript will be printed from a computer or typed on standard, white 20 lb paper. Avoid colored paper. Avoid textured paper (i.e., linen). Avoid tractor feed paper.

[b]General Format.[/b] The manuscript will be typewritten or printed on an ink jet, bubble jet, or laser printer. No handwriting--no matter how neat your writing is.

[b]Spacing.[/b] The manuscript will be double-spaced. See Microsoft Word and WordPerfect: Double-Spacing Your Text.

[b]Type Size:[/b] The guidance here is different, depending on whether you use a computer a typewriter. If you're using a typewriter, set your size to 10 pitch. For a computer, change it to 12 points.

[b]Ink Color.[/b] Black ink only. Anything else is hard to read.

[b]Type Style:[/b] If the publisher doesn't specify what they prefer, use Courier New. Courier was designed specifically to be easy to scan. Give yourself the extra advantage of being more readable.

[b]Margins.[/b] The margins are one inch all around. You can make the top margin 1 1/2 inch, and your header margin, where you page number and title information are, one inch. See Microsoft Word and WordPerfect: Set the Margins.

[b]Header.[/b] At the top of each page, you should have your novel title and last name on the left side, and the page number on the right. This makes it easy to reassemble your manuscript if the pages are separated.

[b]Two spaces or one? [/b] This refers to how many spaces after a period. Start by referring to the publisher's writing guidelines. If the guidelines don't specify, use two spaces. It makes the manuscript easier to read; the sentences won't run together. See Microsoft Word and WordPerfect: Spacing After a Period.

[b]Italics.[/b] Unless the guidelines say that it is all right to use italics, don't. Use the underscore instead. Italics are harder to read and easier for a typesetter to miss. See Microsoft Word and WordPerfect: Underlining Text

[b]Proofread.[/b] You'd be surprised how many people think that it is the editor's job to check for typos, spelling errors, and grammatical mistakes. It's your novel--it's your job. If a publisher has to choose between two manuscripts, one full of mistakes and the other without any, which one is he going to pick? See Effective Proofreading.

Guidelines. Make one last pass over the manuscript, comparing it to any guidelines you have to ensure that you have provided all the information the publisher has requested.

A publisher receives thousands of manuscripts. Many of them are formatted incorrectly and riddled with typos. You can give yourself an extra edge by making your manuscript look as professional as possible. Take the time when you first start writing it to format it properly, and submit it with pride.