YES, they are. I've attached some screencaps of them holding hands that I took with WinDVD.
Still not satisfied?! Then you can download the FMV that includes their hand-holding at Blue Laguna. Here's the link: http://bluelaguna.net/downloads/fmvs/ff8/1/Edea's%20Parade%20Part%201.avi
It's at they very beginning of the video. Squall and Irvine are in the foreground at the very back of the crowd. The camera pans over them very quickly, so you'll have to pause the video. Max out the size. Look carefully and don't be narrow-minded. If you still can't see it, then you must be blind.
Edited to add: it's pretty dark, but you can still make the guys out. Does anyone know how to light screencaps? I have some really big ones, but there are size restrictions for the attachments on these forums. But like I said: watch the video on windows media player, at size 200%, and pause it.
Their arms are in a V-shape; their fingers can be made out curled around each other; Squall looks over at Irvine.
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