Front working vanes work very well on a Type VII.
A leveller works on the rear vanes only, use the front vanes for depth control. A leveller isn't a luxury IMO, but an essential bit of kit unless you run your sub at a snails pace.
The Subtech leveller is a good unit, an alternative is the Engel LR2.
http://www.engel-modellbau.de/catalog/product_info.php?cPath=2_87&products_id=621&osCsid=096de9763277d6ff5aa8357361eafad6The LR2 offers better manual control, the Subtech unit is a bit easier to set-up.
The units are connected in line between the receiver and the servo. The pulse from the receiver to the servo is modifed by a microcontroller depending on the attitude of the boat. The attitude of the boat is sensed by a small device called an accelerometer. These are micro devices developed originally for use in cruise missiles etc. and now handed down to more peaceful pursuits. the Subtech unit uses a small accelerometer that incorporates a micro machined beam and is referenced to gravity- effectively a small pendulum. The LR2 uses a different design of sensor, in this case the sensor has a small bubble of air, small elements heat up the air, and as hot air rises, further sensors in the chip detect which end is hottest, and bias the ouput of the chip accordingly.
The latter type of sensor is a more modern design, cheaper to produce and more rugged (can withstand very high shock loads). In practice either device is more than up to the job of keeping a submarine level, and they're a quantum leap over what was available just a few years ago.
Once you get one, set it up on a bench, and you'll soon get the gist of how they work.
Andy