I've started to use < h2 > tags for all my chapters within the HTML document I plan on using to convert to LRF. Here is an example. (I've added spaces to the tags so they'll be visible.)

< h2 >American Myth< /h2 > or < h2 >Chapter One< /h2 >

These are the settings I'm using in order to center my chapters and add a page break at each chapter. You don't have to use the css override if you don't want to but I find it helps the ebook look nicer.
( LRF css settings )
The next step is to change the chapter detection settings.
( Chapter Detection Settings )
This setting works best for chapters that aren't labeled Chapter One or Book One. If you have chapters that are like Monday, The Last Stand, and etc...you're good to go with the first setting.

If all your chapters start with Chapter or Book you'll need to use this setting instead.
( Alternate Chapter Detection Settings )
The only change is at Detect chapter at tag: Instead of h2,none, you need to use $,,$

If you don't make that change in the Sony PRS Table of Contents you'll get

Chapter One
Chapter One
Chapter Two
Chapter Two

One thing to keep in mind this method only adds the chapters to the Table of Contents on the Sony PRS. The table of contents won't show on the actual story. However, I find going to the Table of Contents rather easy and it's much easier to jump to later chapters using this method. If you do open the LRF in Sony Library you can view your Table of Contents there before adding the story to your device. this is what I'm doing to double check my work.

( Mobi css settings )

( Epub css settings )