I'm very late to this, but I figured it out. They recommend 12kHz because the game plays sounds at 15kHz, so it'll make the voices more squeaky. I suggest just making your .wav files 15kHz and exactly as you want them to sound.
There are actually 2 utilities. Convert should be used as follows for each individual file. -8 forces it to 8-bit and -1 forces it to mono. This will create bungee.raw for example:
convert bungee.wav -RAW -8 -1
The 2nd utility is bankedit, which has a mouse-based interface and is the one you use to put your 66-ish .raw files into one .sfx file. There isn't an easy way provided to separate the .sfx file back into its individual .raw files as far as I can see. Perhaps it's time to create another utility!