If the models themselves are missing, or the panel.cfg does not exist, or something is entered incorrectly in the aircraft.cfg, then FSX cannot load the model. In others words, there are quite a few things that cause the flight model to fail.

Try reinstalling the 707 using the repair option (or uninstall then reinstall it if you prefer). If you are using Vista or Windows 7, make sure you run the file as an administrator.

Mark