It seems to work fine using many different formats (.bin, .int). You should uncompress that 7z file of yours and it will load fine. Use a program called "7-zip" for that (if you don't already have it).
On my old laptop, I created a "Intellivision ROMS" directory and placed all the files I could find there (and uncompressed those that were in .zip or .7z format). Then I pointed the LTO program there using the "add files" button. Then just drag from the left panel to the right.
I actually had a lot of fun arranging things just so. First, I created directories on the LTO flash for the major companies (Activision, Atari, Coleco, Imagic, Mattel, Parker Bros) and one for homebrews. Under Mattel, I created "sports", "action", "arcade", etc. It took time, but I imagine I'll only have to do this once.
Every ROM I had or could think of fits with no issue.