If it's a legit copy, it should work fine. I run FF7 on a Vista laptop, and have no troubles. The only problems I sometimes have is random crashes, but there far enough inbetween to make sure you've recently saved. Also sometimes there's some trouble with the mods. The PRP works on my XP desktop, but not at all on my laptop.
Have you tried just re-installing fresh? Maybe you installed something that corrupted the program file? A wayward mod perhaps?