ok, i had the same problem on final fantasy 7 on windows 2000, on the first battle as soon as the first attack takes place regardless of who does it the game crashes and goes back to windows. also notice if you get a save game and try run it to skip first battle, every time you change rooms it should crash.
you probably have the same problem, heres the solution:
1. Make sure u have at least Service Pack 3 for Windows 2000
2. Download and install the Windows Application Combatibility Toolkit 2.6
get it from
http://www.microsoft.com/downloads/details.aspx?displaylang=en&FamilyID=09DAC794-B803-4B92-83C9-6A9E8B8014343. Run the Compatibility Administration Tool from the toolkit.
Click the 'Fix' button. In the dialog that appears, enter the name of the program (FF7), vendor (SquareSoft), browse to ff7.exe and then click 'Next'.
Select 'None' for Operating System modes and click 'Next'.
Under Fixes, check the boxes: EmulateWriteFile, Shrinker, VirtualRegistry and then click 'Next'.
4. Click 'Select all' then 'Finish'.
5. Click 'Run' and see if it works.
it should run fine know, once you get it to run add it to the database so you won't have to run the tool every time, and enjoy
do let us know if it works!