I guess this sounds like a wrapper for FF7 exe, sounds promising.
Any chance of choosing between MP3 or PSF?
Anychance something like this could come out for FF8?
"a wrapper for FF7 exe" is a pretty good description of it.
MP3 would be somewhat different from PSF. My wrapper currently is hardcoded for PSF support, because I make some patches to Highly Experimental. For example, I hack Highly Experimental's reading of Winamp's plugin.ini so that I can force songs to loop forever regardless of what the user selected in Winamp. Currently, my code doesn't track the state of the PSF player - if I wanted MP3, I'd need to watch it so that I can trigger a loop when the song ended.
My goal was to preserve the optimum quality FF7 experience, not customize it. PSF playback restores the sound to as Uematsu intended. I'd eventually consider the high-resolution patch, the better model patch, and the Advent Children status portrait patch, because those improve quality without changing the gameplay, story or style. Bugfixes would also be acceptable, even if the PSX version had them broken (W-Item as a simple example).
This is all predicated upon me having the time and motivation to continue - currently I'm rather burned out. DirectShow and DirectX are daunting tasks.
As for FF8 PC, I don't have the game or know any technical details about it.