First, make sure that you have Waves version 5.2 installed. You can get it at: www.waves.com
You still need to upgrade to Pro Tools 7 compatibility. This is done through the version 5.0 page: www.waves.com Scroll to the bottom and click on "Waves V5.0 Pro Tools 7 Compatibility Update." Now click on the button for "PT7 TDM PCI Express MAC." Enter your information, and complete the download and installation.

If at any point during the Waves installation you are given the option for "Netshell Environment," select YES only if you have the Waves APA; if not, select NO.

Now, go to digidesign.com > Support > Downloads > Index of Pro Tools CS Updates and download/install the latest Pro Tools HD 7 update.

Now you are compatible. The errors will disappear!