It's done. Can use wav or ogg or mp3, but I think best to use OGG 192 as usual.
The hard part is getting all the effects from a higher quality source and editing them in. I recorded megalixir a long time ago using ps2 spdif.
As a test, I've put it back in. Works a charm. For a first test, all is going very well indeed.
File sizes don't differ too much, either. The original megalixir (mono) in ff7 pc is around 50kb. My 192 ogg version (stereo, which is why I made this 192) is 67 kb.
I'll leave this as a side project for now, but it's promising.