check this site out and it's forum, it probably has a thread somewhere on how to get ff7 to work in windows 7 properly.
qhimm
as for a few interesting things:
I've been toying around with virtualbox to try to get windows xp to have directx support but I've been having severe issues, some people have told me that they can get full support, but I can't get it to work properly. If I can get this to work it means I can play older games on a newer pc easily. (ff7 even has it's XP bugs, but less than vista/7, and they've been patched even if unofficially).
(with this I could also get ffxi to work with multiple monitors and have fullscreen on both with multiple controllers and have it be like multiple pc's (from one pc). (wish I could get it to work...)
there's a program called psxmemtool that lets you convert your pc saves to playstation saves and back, you could download the emulator for the playstation espxe, configure it, copy and convert the save file, load it with the playstation emulator get passed your section, then either play that way or convert the save back.
if you don't have the disc I'd say get it or hell torrent it.