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You need to send an amended tax return using form 1040X - http://www.irs.gov/pub/irs-pdf/f1040x.pdf
Please mark in the header that it is for 2007 tax year.
You will put on the line 17 Amount of tax paid with original return
or on line 19 - Overpayment
Line 20 will show the net balance after corrections.
If you are using tax software - all should be filled automatically.
Let me know if you need any help.
For correction - you need to fill and print out the form 1040X and send it to the IRS.
You do not need to fill the form 1040 again.
You would also need to print all additional forms and schedules that were corrected and attach them to the form 1040X.
You do not need to calculate penalties - the IRS will do that for you and will send you a bill.