I have a Henry AR-7, while it's a fun little rifle that's been reliable, it wouldn't be my first choice if I really needed to depend on having a rifle. The build quality and design just doesn't feel that great, and I have heard enough about reliability issues to not trust it. Of course, I knew about all the issues before even buying it, but i chose to buy it anyway just becaues I liked it.
If I really needed to depend on having a rifle, rather than having to worry about questionable redundant rifles, I would try and make sure my primary rifle is as reliable as I can make it, and it's just better to start off with a more reliable base than the AR-7 than to try and modify the AR-7 into something it's not. It would be like spending tens of thousands of dollars to make a Yugo into a sports car, when for the same price or less you could have just gone out and buy one.
IMO, the only reason you'd choose the AR-7 over anything else is because of the light weight and compactness. The main selling point for most people is the ability to take down the reciever and barrel to store it in the stock. Take away that feature, and you might as well get a 10/22 with a collasible stock which is just a better rifle all around. And if you're gonna carry another barrel and reciever, you might as well just carry another rifle, it wouldn't be adding much more weight. That kinda goes back to the first argument, if you've got the space and ability to carry two rifles, why not just carry a better one to begin with?
With all due respect I find it unreasonable to have to try tens of different brands of amuniton and "alterations" to get a firearm to perform at a minimal level. I don't recall reading in the manual that performance is at my own risk. (I already own a slingshot) I expect with the unique nature of this rifle that problems are inharent. ENOUGH SAID I have yet to receive on my (registered) rifle any notice of problems. Is it really too much to expect the AR-7 to feed amunition reliably? Really? How does Henry qualify this?
If you having trouble with the AR-7's, a common fix would be to polish the feedramp, or chamfer the end of the barrel on the early versions without the chamfer. Ideally, everything should already work straight out of the box, but then again this is a cheap rifle with an unusual design, some people just live with the short comings just because there is currently no other option. Even thousand dollar semi custom guns sometimes have problems right out of the box that need some minor tweaking to make work, but as you go lower and lower on the price scale the problems are more common. And with the AR-7, you're basically at the very bottom of that scale.
I'm lucky that I haven't had any problems (yet), but if I did it's a pretty simple rifle to work on.