in reply to Replacement and conversion of flat file text documents
This has been done a lot, and so there are tools out there. I have done something similar to practice regexes (you can generally mark up consistent text in about six steps if you are happy to only do one thing at a time) but if you don't need to work hard, run the text through a tool, and then run the HTML through somthing like tidy, and you should be good to go.
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