I'll step in only as no replies have come forth, I do not have experience with digital editions.
CS4 was the first release to support any Digital Editions, and it was far from up to the fast evolving standards.
Also frequently noted in these forums is that InDesign is not 100% bulletproof at cross references in Book Documents; indb.
CS5.5 would improve support for your project, assembling the document as one long document, and not using the book pallet would improve the cross refs, and typically, ID's digital editions output needs to be cleaned up with perhaps Siglos (?) or an html editor.
While I'm not adverse to upgrading (after all, I've had this for quite awhile, and it's probably time!), I'm not keen to upgrade and find out that it really was just something silly I was doing in my formats. I have really no problems with cross-references, TOC, numbering, etc. in general when I'm preparing the documens for PDF output, so I really might just be doing something wrong that isn't obvious to me since it works for my initial purposes.
I'm going to download the 5.5 trial, make a copy of the book directory and just give it a shot and see what happens. If I can't get better results with 5.5, then I might have to find someone who can look at my files and tell me what I've done wrong.
So, I downloaded the CS5.5 trial, and I'm sure I will find things I really like in it, but it didn't solve the problem of the missing chapter numbers in the cross references. I'm just going to have to do some hunting :-)
I've found a pretty good tutorial at lynda.com about InDesign and ePub publishing, and I'm thinking this is going to show me what needs to be done. If it's not too verbose when I'm done, I'll report back here!