If I'm remembering correctly, BD uses MS Word as a resource to process certain file types, and from what you've said it must also use it for .LIT files. However, there are a number of conversion apps that will put your .LIT file into something else (like HTML) for you, which BD will handle fine on its own. I'd suggest
Amber Lit Converter, or
ConvertLIT for starters. They seem to be the ones that folks have the best luck with, based on recommendations around here.
