I just installed Eclipse 3.7 and the Google Plugin for Eclipse because I want to teach myself how to use Google App Engine.
When I create a new web application and run,
In case you have not yet found a solution or somebody else is facing this problem:
I had the same problem with the "Project facet" and not having the "Project Facets" page in the project properties when switching from 1.7 down to 1.6. I was able to fix it with editing the file org.eclipse.wst.common.project.facet.core.xml in the project folder .settings.
In this file I had the following code, in which the 1.7 was replaced by 1.6 and the error went away:
EDIT: I forgot to mention that you have to edit the filters on the "Package Explorer" to show .* resources: Select "View Menu" (the down-facing arrow) -> Filters... -> uncheck ".* resources" -> click "Ok" and you should see the .settings folder.