Some excerpts from the Pan Am 707 AOM indicate that the 707 can have one of two different yaw-damper systems, "series" and "parallel", with differing capabilities:
The series yaw damper is always ON. On parallel yaw damper airplanes the yaw damper should be turned on when comfortably airborne (1000 ft. suggested). Remember to trim and release rudder pedal forces before engaging so that the damper has the proper neutral point.
Autopilot/Yaw Damper - OFF
(Leave Series Yaw Damper - ON) Since rudder trim will be necessary, disengage parallel yaw damper/auto-pilot until any trimming of the aircraft is done. The aircraft can be trimmed with the series yaw damper ON. After the aircraft has been trimmed, the parallel yaw damper and the autopilot may be re-engaged. [...]
An FAA notice sent out following a 1969 707 crash also mentions this difference:
[...] EITHER OF THE FOLLOWING PILOT ACTIONS WILL IMMEDIATELY RELEASE THE TAB LOCK LEVER WHICH MECHANICALLY LINKS THE CONTROL TAB TO THE RUDDER PEDALS FOR MANUAL RUDDER OPERATION:
TURNING OFF THE RUDDER POWER SWITCH.
RETURN RUDDER PEDALS TO A NEUTRAL POSITION.
NOTE: CAUTION MUST BE USED IN TURNING OFF THE RUDDER POWER SWITCH WITH THE RUDDER AT OR NEAR FULL DEFLECTION TO PREVENT A RAPID CHANGE IN RUDDER POSITION WHICH MAY ADVERSELY AFFECT AIRCRAFT CONTROL.
NOTE: THESE CHARACTERISTICS APPLY ONLY TO AIRCRAFT HAVING THE SERIES YAW DAMPER. [FAA Notice 8430.115, reproduced in NTSB/AAR-70/08, Appendix G, p. iii (page 56 of the PDF); my emphasis.]
What is the difference between the series and parallel yaw-damper systems, and why do they have differing operational limitations?