As you've noticed, Word 2007 no longer allows you to go via the Modify Style
dialog box when you want to modify outline/multilevel numbering (unless you
are using a list style). However, the general principle remains the same in
Word 2007: numbering should be style-based for stability reasons.
To edit an existing outline-numbered list: Place the insertion point in the
first top-level paragraph of the document (for example, in the first Heading
1 paragraph if this is heading numbering). On the Home tab, click Multilevel
List | Define New Multilevel List. This displays a dialog box similar to the
Customize Outline Numbered dialog box of previous versions (see
http://www.shaunakelly.com/word/numbering/OutlineNumbering.html for a
description of the options).
On the other hand, if you want to create a new outline-numbered list in Word
2007, you should set it up using list styles. On the Home tab, click
Multilevel List, and then click Define New List Style. In the Modify Style
dialog box, type a name for the list style. To define the numbering
properties, click the Format button, and then click Numbering; this displays
the Modify Multilevel List dialog box, where you can change the number
format, indentation, attach paragraph styles to the numbering levels, etc.
The list styles of the active document are displayed under "List Styles" at
Home tab | Multilevel List. You can click a style to apply it to text, but
if you've attached numbering to paragraph styles, you'll find it easier to
apply the appropriate paragraph style directly. To edit a list style,
right-click it and choose Modify from the context menu.