Xenogears is way better than FFVII. But it's only my opinion, of course...

Xenogears had a deeper plot, darker characters, and it introduced an epic to thousands of gamers across the world. FFVII was just an overrated RPG, and even though it spread the RPG mania in western shores, its influence can't be compared to Xenogears' (FFVII's was bigger, but Xenogears caused much more trouble, as it was almost not translated into English, and when it did, there weren't enough copies, at least until 2001, I guess, when new copies were produced).

Again, that's only my opinion, and maybe any of these facts isn't accurate as I'd like them to be.