Ok, well here's the APP after doing what you said:
INFO: FF7/FF8 OpenGL driver version 0.7.8b
INFO: Auto-detected version: FF7 1.02 US English
ERROR: failed to set fullscreen mode
INFO: Intel Intel 965/963 Graphics Media Accelerator 1.5.0 - Build 7.14.10.1409
INFO: No OpenGL 2.0 support detected, shaders won't be available
INFO: Found swap_control extension
INFO: NPOT textures not supported
INFO: Max texture size: 2048x2048
INFO: Original resolution 640x480, window size 640x480, output resolution 640x480, internal resolution 640x480
INFO: FFMpeg movie player plugin loaded
INFO: FFMpeg version SVN-r21874, Copyright (c) 2000-2010 Fabrice Bellard, et al.
INFO: No shaders, codecs with YUV output will be slow.
LOCK UNLOCK TEST
MATRIX INITIALIZE
INITIALIZE DD/D3D END
initializing sound...
creating dsound primary buffer
reading audio file
loading static sounds
sound initialized
INITIALIZING MIDI...
selecting device 0:Microsoft GS Wavetable Synth, mid=1, pid=27,
midi data type: YAMAHA XG MIDI
using midi data file: C:\Program Files\Square Soft, Inc.\Final Fantasy VII\Data\midi\xg.lgp
midiOutGetVolume returned: ffffffff
MIDI INITIALIZED
set music volume: 127
MIDI set volume: 127
100% of 127 = 127
set music volume: 127
MIDI set master volume: 0
MIDI set volume: 127
0% of 127 = 0
Entering MAIN
Exiting MAIN
START OF CREDITS!!!
ERROR: couldn't open movie file
INFO: E:\ff7\movies\sqlogo.avi; truemotion2/pcm_u8 320x224, 15.000000 FPS, duration: 14.533333, frames: 218
set music volume: 127
MIDI set volume: 127
0% of 127 = 0
MIDI play: 95
reading midi file: PRE.mid
current volume: 127
MIDI is playing SUCCESSFULLY!!!
set music volume trans: 127->0, step=60
MIDI set volume trans: 127->0; step=60
MIDI stop - OK
END OF CREDITS!!!
Entering MAIN
set music volume: 127
MIDI set volume: 127
0% of 127 = 0
Exiting MAIN
START OF MENU SYSTEM!!!
END OF MENU SYSTEM!!!
Entering MAIN
Exiting MAIN
Field Start
UNEXPECTED: invalid blendmode (458756)
BLEND MODE NOT FOUND
UNEXPECTED: invalid blendmode (458756)
BLEND MODE NOT FOUND
UNEXPECTED: invalid blendmode (458756)
BLEND MODE NOT FOUND
ERROR: unhandled exception
Everything in-game is exactly the same; crash takes place after starting a new game and the 'couldn't open movie file' error still appears.