Ah, yes I had this exact same issue with my GeForce3 and it seemed to mysteriously disppaear when I put in my Radeon 9700.
First, check your video drivers; updating them may just resolve the issue.
Try unclicking the box for Nvidia in the config screen.
When I had this issue, I was running FF7 in XP under Win98 compatibility mode. What I'd recommend doing is right clicking your shortcut to start FF7, and go to Properties. Click on the "Compatibility" tab. Make sure that the checkbox for "Run this program in compatibility..." is _not_ checked.
If you still get slow response, check to make sure all your drives (hard drives and CD-ROM drives) are using some sort of DMA mode. To check it, right click My Computer, go to Properties, click on Device Manager under the Hardware tab, click the "+" sign next to IDE ATA/ATAPI controllers, then double-click Primary IDE channel. Check under the "Advanced Settings" tab. If you see PIO mode, you will get slow performance. Check under Secondary IDE channel as well and look for the same thing. To correct this, contact your hard drive or CD-ROM drive's manufacturer for help on enabling DMA mode.
Lastly, make sure your motherboard's latest drivers are installed. This make cause some graphic loading issues if your AGP drivers are not properly installed.
As a final resort, you might just have to play the game in software rendering mode.
--Sir Sanjiyan