Standard manuscript format looks arbitrary until you consider what an agent's inbox actually looks like: dozens of submissions a week, each one needing to be scanned quickly for whether it's worth a closer read. The format exists to make that scan fast and fair, not to test whether you know the rules.
Font: Times New Roman or Courier New, 12pt
Both are readable, evenly spaced, and let an agent estimate word count accurately from page count, something a proportional or stylized font makes harder to judge. A more distinctive font might look better to you; to an agent, it reads as a signal that you haven't looked into submission conventions, before they've read a word of the story.
Double-spaced, with a half-inch first-line indent
Double spacing leaves room for an agent or editor to mark up a page by hand. The first-line indent (a half inch, set through paragraph styles, not the Tab key) marks new paragraphs clearly without an extra blank line between them, which would waste space and make the manuscript longer than it needs to look on the page.
A running header on every page
The convention is Lastname / TITLE / page number, appearing in the header of every page after the title page. If a printed manuscript gets separated from its cover sheet or shuffled with another submission, this header is what identifies whose pages they are and where in the book they belong.
Chapter headings: consistent and simple
Centered, a third to halfway down a new page, in the same font as the body text, no decorative fonts or graphics. "Chapter One" or just "One" both work; what matters is picking one style and using it consistently across every chapter.
A title page with the essentials
Your contact information (name, address, email, phone) in the top-left corner, an estimated word count in the top-right, and the title and your byline centered roughly a third of the way down the page. No cover art, no fancy fonts, no decoration.
Why this matters more than it might seem to
None of these choices affect the writing itself. What they do is signal, before an agent reads a single sentence of your actual story, whether you've done the basic homework of how submissions work. A manuscript in the wrong font or without a proper header doesn't get rejected on formatting alone, but it starts the read from a small deficit that correct formatting simply avoids.
Formatting a manuscript to this standard by hand means setting and maintaining every one of these choices across the whole document yourself. Quillen's editor renders in this exact format automatically, Times New Roman, 12pt, double-spaced, proper indents and headings, so there's nothing here to configure or get slightly wrong.

Common questions
What font do literary agents want for a manuscript?
Times New Roman or Courier New at 12pt is the near-universal standard, both readable, evenly spaced serif or monospace fonts that make an accurate word count easy to estimate from page count. Deviating from this, even with a more stylish font, reads as a red flag before an agent reads a single sentence.
Do I need a header with my name and the title on every page?
Yes. The convention is Lastname / TITLE / page number in the header of every page after the title page. It exists so that if pages get separated or printed out, whoever's reading can tell whose manuscript they're holding and roughly where in the book they are.