I'm running:
Windows 7 build 7201 x64
Nvidia Geforce 9800m gs
4gb RAM
Intel Centrino 2
My compatibility options on both ff7.exe and ff7music.exe are untouched.
You may want to try putting the movies on the hard drive then going into "regedit" HKLM>software>WOW6432node>Square Soft, Inc>Final Fantasy VII
and making sure all your data paths are good.
Also, I had one hell of a time getting all my drivers (originally was Vista x64) working right, so you may want to download all drivers available for your computer and install them one by one. Then google your computer type + Windows 7 to see what problems and solutions anyone else has found. After 2-3 days of tinkering mine works flawlessly