As far as I know the HTML to XHTML conversion only occurs when opening the topics. Unless it was recently added I am not aware of a mass conversion option. If there is indeed none feel free to request that feature here: https://www.madcapsoftware.com/bugs/submit.aspx
It's one of those tasks that's almost too simple. All you have to do is copy the HTML files into your Flare project's folder structure and open them so that Flare can convert them to XML. After that, add them to a TOC etc. as normal.
The Add New Topic function isn't for importing HTML files, it's for creating a brand spanking new topic.
Also, you don't have to convert an HTML file in order to use it, so if you have files in your existing system that don't need to be modified, you can just link to them in the TOC or though href or xref links and build your output. If you ever do need to make a change, Flare will convert the file the first time you open it in Flare's XML editor.
Until next time....
Kevin Amery
Certified MAD for Flare
That was exactly what happened to me. I tried doing it the way they said to in the guide, but copying the .html file and pasting it into the folder works like a dream! Very good for on-going projects..!