I just wanted to congratulate you on this awesome achievement and say that I got it to work for me on Windows 7. It took a little bit of trying different things, but I eventually realized that your REG file updates the registry, but FF7Config and FF7 must be using the virtual store, even after rebooting. I tried running FF7 as an administrator, but it kept giving me errors. I finally ran FF7Config as an administrator and it was set to the default settings, so I changed them and then ran FF7 as admin and it works great. I have a 24" monitor set to 1920x1200 and it runs wonderfully in that. My monitor has a built-in option to run 4:3 applications in aspect ratio, though, so I didn't worry about that part.
Also, the shaders don't work for me when they are in the same directory as FF7Music. They have to be in the same directory as FF7. Weird.