Bullet and Number List

The Before and After settings are defined in the Paragraph dialog. The Left and Hanging settings that you have defined in the Paragraph dialog are overridden by settings in the Define New Multilevel List dialog (there are no such settings in the Define New Number Format dialog, so you can't use that to create a numbered style). If you want the paragraph to have a 0.5" left indent and 0.25" hanging indent, then you need to set "Aligned at" to 0.5" and "Indent at" to 0.75".

The 99 Priority is the default for new styles; if you want the style to have a higher priority, you can use the Style Manager to change it.

FWIW, the built-in List Bullet 3 style will give you the indent and hanging indent that you are looking for.

Seems you can change the indention for numbered lists not bullet lists. . . So this information is not really helpful. I understand how to create bulleted and numbered lists - but do not know how to get rid of the bogus indent information which seems to be causing problems when I generate a Word document through the authoring tool Doc-To-Help. 

A worse example is the following:

I have no idea where the Aligned at: 2.9 or the Indent at: 3.15 comes from or how to get rid of it. . .