An m3u file is a playlist. It simply tells your audio player which tracks to play and in what order.
The little zero length mp3 files you are getting are probably system click noises (like button clicks) - SoundTap records anything that comes through the sound card.
The 12 minute files are probably the tracks specified by the m3u playlist. The reason you may get more than one is there could have been an interruption to the stream. SoundTap starts a new file for every new stream it receives.
If you would like to edit the files you have recorded to cut and join them, I would suggest using WavePad http://www.nch.com.au/wavepad/masters.html
BW