Uninstall that copy of FFVII (and backup your save folder if you wish), delete the mods from the install folder, use a registry cleaner (preferably, I didn't use one but my newer versions of FFVII still work great), and reinstall, using 7thHeaven to mod instead.
Though it could just be that that's how the upscaled backgrounds look on bootlegged FFVII, it's been a while.
Or, you could dig through the
Bootleg section of the forum to see if that's already been asked.