Couldn't get the AdventAvatars patch to work on my PC, so I made my own! (Yes, the portraits are actually 256 colors! Much less dithering artifacts than the original AdventAvatars!
http://cl0ud.net/FF7_AC_Portraits_Finished.zipThe zip file contains the portraits (256 color/8bit BMPs) in both normal and small versions. There is also the menu_us.lgp from the North American version of FF7 PC. Just drop it in the data\menu folder in your FF7 install dir. (Back up your original menu_us.lgp first!) Saves fiddling with cranky patch files.
http://i33.tinypic.com/2z8yfs4.png for fullsize
First two images correspond 640x480/320x240 with hardware rendering, last two correspond to 640x480/320x240 with software rendering.
Tested on 640x480/320x240 with hardware/software rendering. Also tested on my server with an old GPU that actually passes the 8bit paletted textures test. No problems whatsoever.
P.S. I tried to find scenes in which the characters were as close to their poses in the "original" concept art portraits as possible, so I hope that this will appease the "I want the original Cloud/Tifa" people...