Again, you can force Va to greater values than .7 but it requires exponentially more current to reach those higher levels, and the diode characteristic equation is no longer valid in those higher voltage cases due to the reasons I stated in my last post.
All that said, for most practical cases Phi is roughly zero plus or minus a few tenths of a volt in forward bias. And yes, when the voltage is roughly .7 the diode is conducting (allowing electrons to go from N-side to P-side and holes from P-side to N-side) because of the lack of a barrier across the junction.
If you look at a graph of the ideal diode characteristic (V-I) plot you can really see how once you get a positive voltage of around .7v the current sharply increases. Of course V(bi) is different for different semiconductors and Si happens to be .7v whereas Vbi of Ge is around .2v. In this article from wiki you can see a a V-I plot of an ideal diode. Notice that the current shoots up quickly as you reach Vbi. Also, at extreme negatives the current shoots down quickly due to some other phenomenon (mainly avalanching).
http://en.wikipedia.org/wiki/Diode
If you have any more questions feel free to ask, I am enjoying actually remembering all of this stuff.