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I'm trying to determine if we need to upgrade all of our clients if we were to switch over to using Project Server 2010. Right now we are just using Project Professional 2007, so my question is if we need to purchase Project Professional 2010 or can we still use the 2007 version?

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Yes, Project 2007 clientes are supported, as long as Backward Compatibility Mode is enabled on the server:

Office Project Professional 2007 will only connect to Project Server 2010 when Backwards Compatibility Mode (BCM) is enabled on the server. For more information about BCM, see Project Server 2010 upgrade overview.

http://technet.microsoft.com/en-us/library/ee683978.aspx

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