The app config file for acad can be set to target a particular version of the .NET framework. By default it targets the highest version but you can explicitly set it for acad 2006 and 2007 individually. If acad2007 is set to target the 2.0 framework and your plug-in was compiled with 1.1 framework then it won't load. That is why you're getting the "Unknown Command" error. Modify the app config file in the program files folder where the executable lives to look for the same version of the framework that you're using. Each version of visual studio is designed to target a particular framework as well. VS2003 = 1.1fx, VS2005=2.0fx.
How would one compile a dll for AutoCAD 2007, referencing AcDbMgd.dll and AcmGD.dll from AutoCAD 2007, in v1.1 of the framework anyways? This should not compile. You would be referencing v2.0 components that require v2.0 of the framework?