Do a full install of the game.
Apply the 1.02 patch from eidos (Or you can find it
here. Just replace the EXE and the Config, overwrite if asked.
Download this patch. Open it up using WinRAR (If you don't have winrar, you can get it for free online. Do a google seach =) )
Double-click the exe within, and hit "Patch!"
It will then check for a legit version of the game. If this check fails, the patch won't install. However, if the check succeds, the game will then be patched =)
Now open FF7 and try it out =) If it doesnt work, that may mean your video card doesnt support high resolutions. If that's the case, then you're outta luck =/ You'll have to re-apply the 1.02 patch to get your game working again.