Jonathan,
The documentation that you referred to is outdated. Please refer to the following documentation instead: https://confluence.atlassian.com/display/SPCON/Planning+your+Environment+with+SP+2010
To answer your question, yes, SharePoint 2010 is compatible with SharePoint Connector 1.7. However, please ensure that you are using Confluence 5.x in order to use SharePoint Connector 1.7.
Anyway, it's very hard to know why you are seeing this error without looking at the logs. So I'd advise you to raise a new support ticket at support.atlassian.com so that we can investigate about this matter.
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