On my 2010 1099 misc from the state of Illinois comptroller-witholding agent, box 7 was check. Do I owed money?

1099-misc (nonemployee compensation) income: You are independent contractor. You must file your tax return if yourself employed income is $400 or more. You will report your income and business related expenses on schedule C or C-EZ (Form 1040). Then you put net income (or loss) on line 12 of Form 1040. This income is subject to SE tax at 13.3% (this is shown on line 57 of Form 1040).
Even though schedule C treats you as a self employed, which may not be correct for you, this is how you report this income. Your U.S. Tax Return: Tax Filing by Self Employed Sole Proprietor or Independent Contractor (http://taxipay.blogspot.com/2008/04/tax-filing-by-self-employed-sole.html)
With 1099-misc you will end up paying about 7.2% more taxes as compared to W-2 employee. The benefit is that with 1099-misc you can deduct your business related expenses on schedule C or C-EZ whereas a W-2 employee you can deduct it only as itemized deduction subject to 2% AGI limit.