vb runtime error 504 seems to be Object net safe for creating
which might mean that you've got your macro security settings too high or something.
So what happens now is we go through the steps and then it gets to the "Opening this document will run the following SQL command" and click Yes to continue, the SQL msg comes up again (that never happened before)
Also, Word mail merge documents go through a sequence of attempting to locate it's data file and it looks like it's failing if you see the SQL message multiple times - it might be that Word 2003 had the current directory configured correctly, and Word 2007 might be working in a different directory. Maybe try putting the full path in the macro instead of a relative path e.g. WordBasic.Activate "C:\Path\To\MergeDoc\Quote.doc" ?