Just to remind you;
FF7.exe also runs a CDcheck.exe.
They both look in the registry for the DATADRIVE key under HKLM\SQUARE SOFT INC\FINAL FANTASY VII\...
That is the drive letter which FF7 was installed from.
That is if FF7 is a Full Install it will only search for the movies in that drive letter/path.
Now, it also checks the CD LABEL to see if it matches the disk FF7 is looking for, ie: FF7DISC1 , FF7DISC2.
I have previously made a folder called MOVIES and copied the MOVIES folder to it, LABELLED the harddrive "FF7DISC1" and changed the reg key to point to "E:\" and it works.
I have also just used a RAMDISK called FF7DISC2 and with nothing it in and I can just get past the eidos screen by hammering the OK button on the gamepad (of course in game might hang if it is looking for a vital video).
SO it IS possible to have a FLASHDRIVE or portable drive with all your FF7 Movies on it, and say keep a batch file for renaming that drive to what ever CD FF7 is looking for, if you are like me and dont want to always be putting in the FF7 CD when you want to play ff7.
EDIT: BTW this was all done on win98 I think, was a few years back now.