Your 7z installation is broken. Re-install it and see if it gets better. I was trying to help out in another thread with the exact same error and while investigating, we found out that something, or someone, had changed the symbolic links that are used by 7z.
# 7z x /home/user/MyDocs/maemo-sdk-rootstrap_5.0_10.2010.19-1_armel.tgz -o /floppy Error: Incorrect command line