this is kinda a stupid question.. why don't you look at the compatibility or test the emulator out yourself? Yes it runs both CDs and "roms". The roms are in the forms of CD images
The ROMS are ISOs, and it can run games off CD NOT GD-ROM. You can't take a regular Dreamcast game and play it. You either have to rip it yourself or get it off the internet, neither of which we can tell you how to do.