You have to place the DDS files into a new FSX\SimObjects\Airplanes\CS_B707-300\texture.X folder (i.e. texture.aa2, as there is already a texture.aa) along with a texture.cfg (copy the one from the texture.aa folder and paste it into the texture.aa2 folder otherwise you will have black areas on your repainted aircraft).

Next, you add an entry into the aircraft.cfg file (I use Windows Notepad to edit .cfg files and always backup the original before you make any changes!) like this:

[fltsim.X] <- use the next consecutive number after the last [fltsim.X] entry!
title=CS_B707-300 Paint X <- I make this the same number as the number in the [fltsim.X]
sim=csx701
model=adv <- can be adv, b, or 300
panel=
sound=
texture=aa2 <- must match the texture.aa2 folder name
kb_checklists=
kb_reference=
atc_id=N885PA <- aircraft registration number
atc_airline=American <- Airline (AFAIK the ATC uses American, not American Airlines, so use that)
atc_flight_number=701
atc_heavy=
atc_parking_types=GATE,RAMP
ui_manufacturer=Boeing
ui_type=707-300B ADV <- can be 707-300, 707-300B, or 707-300B ADV (goes the 300, b, or adv in the model= entry)
ui_variation=American Airlines <- shows as American Airlines in the aircraft selection screen
ui_typerole=Commercial Airliner
ui_createdby=Captain Sim
description=707-321B ADV Jet Clipper Northern Light (20024/776)\n707 Captain (707-300) 1.3\n(c) 2011 Captain Sim www.captainsim.com <put whatever info you want here, including your info as the repainter, but make sure you add the red text to acknowledge that the addon is made by Captain Sim. Note. /n adds a linefeed/carriage return.

Do all of that correctly, and you should see your repainted CS 707 in the list of Aircraft on the aircraft selection screen.

Good luck. ;)