Yea u could play FF 7 on ur comp, if u finish installing it, click start, program, and select FF 7, and u see the FF 7 game right? Then u right click on the FF 7 then click on properties, then compatability tab, then click on run as Windows 95 or 98 or Windows 2000/ME. Then u can run the game.
FF7 does work in XP, but I have found it crashes on my system during two points of the game: The chocobo races and one other spot that I cannot remember.
I had to install FF7 on a 98 machine, restore the save file, play past the "bad" part, save the game, then restore that save file on my XP machine to continue. What a pain! Thats why I keep a win98 partition for situations like that.
Oh, and compatibility mode didn't help in my case.