Hi and welcome to Knitting Help!
The fact that your knit stiches look correct (like nicely lined up Vs)when you knit in the round makes me think that you might be forgetting to alternate knit and purl rows when you knit back and forth (knitting flat). This with give you the nicely aligned Vs on one side and purl bumps on the other. This video for stockinette stitch shows you what I mean.
http://www.knittinghelp.com/video/pl...stitch-english