Case 1
You use oneside and the default includemp which is false. The marginpar will be on the right side margin. In this case, you must make sure
marginparsep + marginparwidth < rmargin

\documentclass[draft,letterpaper,oneside]{amsbook}
\usepackage{fixme}
\usepackage
[
%-------------------------------------------------------------------------------------------
%
%for symmetrical margin, just use margin instead of lmargin, rmagin, etc.
margin=1.3in,
%-------------------------------------------------------------------------------------------
%
%includemp=true,% uncomment this if you want the marginpar is placed inside the outer margin.
%-------------------------------------------------------------------------------------------
%
%If you use oneside document and default includemp (which is false)
%marginparwidth + marginparsep < rmargin
marginparwidth=1in,
marginparsep=0.2in
%-------------------------------------------------------------------------------------------
]{geometry}
\def\dummy{I can find a tool to convert EPS to PDF in my neither bathroom nor kitchen.}
\usepackage{lipsum}
\begin{document}
\listoffixmes
\lipsum[1]
\fixme{\dummy}
\lipsum[3]
\newpage
\lipsum[4]
\fixme{\dummy}
\lipsum[6]
\end{document}
Case 2
You use oneside and includemp=true. The marginpar will be on the right side but it gets moved rmargin to the left. You must make sure that
marginparsep + marginparwidth < textwidth

\documentclass[draft,letterpaper,oneside]{amsbook}
\usepackage{fixme}
\usepackage
[
%-------------------------------------------------------------------------------------------
%
%for symmetrical margin, just use margin instead of lmargin, rmagin, etc.
margin=1.3in,
%-------------------------------------------------------------------------------------------
%
includemp=true,%marginpar is placed inside the outer margin.
%-------------------------------------------------------------------------------------------
%
%If you use oneside document and includemp = true
%marginparwidth + marginparsep < textwidth
marginparwidth=1.9in,
marginparsep=0.1in
%-------------------------------------------------------------------------------------------
]{geometry}
\def\dummy{I can find a tool to convert EPS to PDF in my neither bathroom nor kitchen.}
\usepackage{lipsum}
\begin{document}
\listoffixmes
\lipsum[1]
\fixme{\dummy}
\lipsum[3]
\newpage
\lipsum[4]
\fixme{\dummy}
\lipsum[6]
\end{document}
todonotespackage, and not familiar withfixme, but its not clear to me exactly what the problem is with the formatting of the output. – Peter Grill Jul 21 '11 at 07:31