Haven't heard the 407s yet, but they do seem to be mostly similar to the 507 save for the frame, pads, and cables.
The first Stax I purchased for myself were the original 404s. They're not the best Lambdas by a long shot (the 202s and 404LEs are better), but at the time I was still pretty much impressed by them. As to the question of whether the 404LEs are better than other stuff out there, I think that really depends. The HD600 and HD650s are still some of the best dynamics out on the market, and the 404LE isn't going to "blow them away" or anything. But the presentation of Lambdas is so distinct and unique, so satisfying and addictive, that it's a side step well worth taking IMHO.
I think Lambdas are the quintessential introduction to 'stats, as they're just so stereotypical of what the technology is all about, what it does well, what its limitations are.