Sidony,
If you have more itemized deductions (schedule A) than the standard deduction you should use the itemized. Itemized deductions included medical expenses, mortgage interest, automobile taxes, stuff like that. Your therapist should be able to tell you how much you paid him during 2007 versus how much your insurance paid him. Usually they have accountants that can easily get this info for you.

The amount you paid into your FSA (pre-tax $) is included in the calculation of what is medical deduductios (if you used the $ to pay bills.)

For medical deductions on schedule A (itemized), unfortunately you can only deduct medical and dental expenses if the amount you paid exceeds 7.5% of your adjusted gross income. (The form will help you calculate this). If you have other itemized deductions you put those on schedule A also, then you see if Schedule A is greater than the standard deduction of $5,530 for an individual.

Did this help at all? Feel free to ask me to clarify.