Tax Implictions: Partnership K-1 Income vs. 1099 (Independent Consultant) Income?

Until last year (through 2005), I was paid as Independent Consultant (Form 1099) at the company I work for. However, starting in 2006, I am now considered 7% partner of the firm and now receive income in the form of K-1 (I guess the correct term is partnership distribution). My question is what are the tax implications? I understand I will no longer be able to deduct many of the deduction that I was entitled to under 1099, but at the same time, I heard that I would no longer be required to pay Self-Employment Tax (Social Security and Medicare taxes)...is this true? Any other benefits or drawbacks? Thanks!