My apologies if somebody has already come up with this solution and posted it. I searched for hours before coming up with this without finding anywhere else it had been posted. Great minds think alike.
After spending many hours of trial and error... mostly error... trying various workarounds on videos running slowly, crashing, or freezing my game. Getting stuck in the planetarium was the last straw and just as I was about to stab my PC, I noticed a similarity in almost all of the suggestions. They had something to do with the Truevideo codecs.
My solution? Recode the videos with a different and more modern codec (cinepak). It's going to take my PC about an hour to finish converting all of the videos, but I tried it with the first few videos that play (edios logo, squeenix logo, the intro video, and cloud jumping onto the train, and then the entire boogen scene where he tells you about the planet dying) and it works perfectly.
No errors, no crashing, no slow playback.
I'll try to upload them to the web somewhere when I'm done, but if you want to do this on your own, this is what I did:
1) Used Windows Movie Maker (comes with XP) to turn all of the game's AVI files into uncompressed WMV files. This will take a bit of work as you'll be doing them one at a time, make certain you name all the files correctly. I'm not posting a tutorial on how to use Movie Maker, sorry.
2) Used another program to convert said WMV files back int AVI files with the Cinepak codec. It probably doesn't matter what program you use to do this, I used this one:
http://www.appfree.net/wmv-to-avi-mpeg/ If you use this one, there is an option to do many files at once, so you don't have to sit and do them all one at a time. It will still take a while to convert the videos though.
Make certain you set the program to put a codec on the new file (Cinepak works, if you want to try a different codec, I can't vouch that it will work). My original idea was just to try making the game play raw avi files, but that didn't work either.3) Move all of these new AVI files into a folder in your FF7 directory, then edit the registry to point the game to this folder.
--- Click Start
--- Click Run
--- Type Regedit
--- Click Ok
--- Navigate to HKEY_LOCAL_MACHINE \ SOFTWARE \ SQUARE SOFT, INC \ FINAL FANTASY VII
--- Click once on FINAL FANTASY VII
--- In the panel on the right, right click on Video path
--- Click Modify
--- Change it to where ever you put those videos. For me, this was "C:\Program Files\Square Soft, Inc\Final Fantasy VII\data\movies\"
4) Start your game and enjoy.
--Xelah