A 1099Q is the report of a distribution from your 529 plan. The basis is the amount that you contributed to the plan, and the distribution amount represents the basis plus earnings. (the distribution could also be less if the plan lost money). Earnings are not taxable as long as the distribution was used for qualified education expenses, such as tuition, fees, books, room and board, etc. If this is the case, you will not need to report anything on your tax form regarding the 1099Q, because this is considered a "qualified" distribution.
The 1098 T lists amounts that the college billed you in 06 for tuition and fees. These amounts (if paid by you or by loans taken out by you) may be used for tuition and fees deduction, Hope Credit, or Lifetime learning credit, whichever benefits you the most and whichever you meet the requirements for. The only thing you cannot do is use tuition and fees paid for by the nontaxable earnings of your 529 plan for tax education benefits. In other words, if your 529 plan had 1000 dollars of interest that you paid tuition with, you could not use that same 1000 dollars of tuition to take any of the education tax benefits.
Much more detailed information can be found in Pub 970, (chapter 8 for the 1099Q):
Let me know if you need further assistance.