Yes, the 1.04 patch edits the FF7.exe without users knowledge as dziugo says. It is also from what I hear prime cause for some faults with the game on XP of all things.
I used it when I installed FF7 after a long long time, and thought I was doing something sensible. However I experienced constant crashes and back to desktops.
I signed up here, read about it, put in the 1.02 (after too many questions asked on my part), and it worked perfect ever since.