For PSX emulators, the most compatible one is Virtual Game Station. Hard to find the full version, they only have the demo at Zophar.net and it was taken off the shelves years ago. Do google searches for "cvgs141.zip" (and other variations on that name) and you should find the full version, likely on a site in some foreign language. If you can get one of the freeware emulators to work (I always have trouble with them) you can get better graphics/performance but make sure you get one that's compatible with FFVII.

I myself have the PC version, and it's kinda finicky. If you've got Windows 2000 you'll need the Application Compatibility Toolkit - download it from the Microsoft website. I think you'll need it for XP too. There's instructions on how to set it up at http://www.ffseven.com/faq.php.