We've created this Forum Thread with some workarounds and advice to assist you in publishing you ebook.
For Lulu's formatting purposes, is Palatino Linotype the same as Palatino?
This is the page in question: http://connect.lulu.com/t5/Interior-Formatting/Recommended-Fonts-for-Microsoft-Word-Documents/ta-p/33679
Somehow, my MS Word has Palatino Linotype but not Palatino. Is there technologically a difference in Lulu's file converting context?