I have text and pictures. This is what I did:
Word 2003, saved as .doc. If you have a new version of Word, they say to save as older version of Word.
I inserted a picture, saved as PNG in MS Paint, into the Word doc. I made a page break. I then inserted the next picture and did a page break.
The text was separate. I inserted the picture in the text where it belonged. Page break before and after picture.
Some have used section breaks, but I haven't tried that.
It's all one document.
Pubit! had no trouble converting . The book looked fine.
I think the REAL magazines and such have actually created an app not an epub. It depends on the e-reader what can be seen, and most are NOT capable of magazine layout.
The real magazines, the ones with publishing contracts with B&N have not created a distinct app, if you take the sample file and add it manually to your device, you can see the formatting in action.
I added a post about it here: http://bookclubs.barnesandnoble.com/t5/PubIt-Help-Board/Nook-Color-Fixed-Format-ePub/m-p/1267527/highlight/true#M4552
What seems to be unanswered anywhere is whether or not this type of formatting, DRP magazine style formatting is available by publishing through pubit. My guess, sadly, is that it is not.