Tip & Tricks, a very reliable gaming magazine I subscribe to, has briefly mentioned some tidbits about the prequal to FFVII. It's called "Final Fantasy VII: Before Crisis" and you walk around as people that look to be Turks. This is based about six years before the happenings of FFVII.
According to the pictures (which don't necessarily mean anything), it's an action game, not RPG. You walk around and fight enemies as they appear on the screen (like with Final Fight). So far, it's only for Japanese cell phones of some sort.
This kinda' sucks. I think they're really trying to get people to stop asking for sequals to FFVII. They never really liked FFVII in the first place. They were more interested with FFVIII, and FFVII was just a practice run to learn the coding. So says Squaresoft themselves (in an interview with T&T).