I recently read up on this as I'm consider a 6->7 speed freewheel conversion for my 12-speeds. As usual, there's a good description at the Harris Cyclery site. I highly recommend a visit there.

As I recall, a Shimano 7-speed freewheel is $20. You'll also want the Park 2-notch freewheel tool. And something to brace it in to spin the freewheel off the hub.