As a business owner, I sent a few 1099 for 2007 for my sub-contractors (all of them were filed in time, before 01/31/08).
I just realized that due to accounting error, I should have reported a higher amount of some of them. Can I send my sub-contractors (and to the IRS) an amended 1099-MISC form that includes the right amount this time. Is there a penalty for that?
The amount I reported on the tax return is the correct (and higher) amount.

If the difference between what was originally reported and what is correct is less than $200, I would not bother. That falls into the de minimus category.

Otherwise, yes, an amended Form 1099-MISC should be filed and sent to both the IRS and the state.

Not sure about the penalty, but if there is one, it should not exceed $50 per amended 1099.

I just found out that one of our vendors gave us an incorrect fein number.

When I amend my 1099's, do I just submit only his 1099 and enter the correct id number?

Yes, I believe that is what you need to do.