just wanted to let all of the hardcore FF7 fans that the newest nvidia drivers fix the texture corruption with those crazy messed up pallette textures when turning on AA at either 2x 4x or Quincunx. the newest nvidia drivers release from the company are WHOL certified at version 44.03. these drivers are hella stable for most of my games and were usually meant to update the newest FX chipsets, however i'm assuming Nvidia fixted other things such as AA and AF with this release.
 
this is the way how i got mine to work.
1. install the game
2. install the latest Nvidia TNT patch from Eidos
3. install that windows XP/2000 patch from that "possible fix" forum board...i forgot what that patch is called but file name should be "ff7-1.02-patch".
4. Do the Configuration for FF7 and use the following settings.
*Direct3D Hardware Acceleration
*640x480 16bpp (full screen)
*NVIDIA box - leave unchecked!
note: the 8-bit Paletted Textures should say "Pass", if i would have checked this and used TNT, my system would not load the game.
 
5. set your AA settings and your AF to your prefered quality.
6. run the game....everything should work.
 
this is my system setup:
Athlon XP 1800+
Epox 8KHA+
1024mb Crucial PC2100
Philips 408 soundcard
Yamaha Synthesizer S-YXG50 V4.0
Windows XP professional
DirectX 9.0 API
PNY Verto Ti4200 64mb AGP Drivers 44.03 WHQL