They won't show up.
You have to install The Homebrew Channel and put those applications under /Apps/ on the memory card and then they'll show up under HBC.
They stay as .dol.
You're not going to be able to play gamecube backups properly. It won't work through the disk channel, and it won't work using just cIOS.
You'll need a gamecube backup loader. I forget the name of the one I have.
It works maybe 75% of the time for me. You'll need to run that through HBC, you won't need WAD Manager for it unless you're installing a channel to the main home screen that links to the application in the HBC.
What hack are you using? Bannerbomb?