I had problems at first getting it to run on XP Pro, but I pretty much resolved all the issues with the following steps:
1. First in your Video drivers make sure Anti-Aliasing is either disabled or is application controlled.
2. Install game > Apply Riva Hardware Patch 1.02 > Chocobo Patch > Upside-Down movie patch
3. Pull the movies off the CD to the harddrive in whichever folder you like but I usually put the movies in the FF7 Folder in a sub-folder called Movies.
Do a registry edit for the movies by following this right-up Courtesy of qhimm.com member Emperor Steele:
www.ff7-universe.com and then click the download link on the left side of the page. Scroll all the way to the bottom to the link labeled "Play FMV's from your Harddrive". Playing the movies from the harddrive made them play A LOT Smoother for me.
4. Now that you have Final Fantasy 7 installed, find the FF7.exe in the directory where you installed FF7, right-click > Properties > and in the Properties dialogue box there should be a setting labeled "Compatibility Mode". Select either Windows 98 or 95.
Now run Final Fantasy 7 from the FF7.exe and you should first get a configuration prompt. Check the box for using Hardware acceleration and then select the radio button corresponding to Riva graphics cards (not TNT). This will enable hardware accelaration, and you should be good to go from there.
Hope that resolves your issue. Good luck
