Are you using popsloader? Many games won't work right unless you use that to set which firmwares PS1 emulator is used. Digging through the entries for FF7 on this compatibility wiki I found this suggestion;
"After many hours of perfect gameplay, it finally froze in Rocket Town while the FMV was playing. Also hangs on 4.01 & 3.90. FMV plays fine on 3.71, 3.72 & 3.80".
I also saw quite a few entries saying to use PSX2PSP to convert your disc images, so that might help if the copy you already have still won't work.
"I think that the problem with this video is it is highly derivative of many popular bands within the genre. Although when viewed on its own merits, it does have a deeper groove. However what it has in groove, it lacks in originality. One can't help but be reminded of such bands as Pearl Jam, White Zombie, Suicidal Tendencies and other bands that bear the mantle of so called "Alternative Rock". One is even reminded of Lorie Anderson when she wore curlers. Hehehmhm! This video speaks less to the heart and more to the sphincter. In closing, I think Korn would do well to learn more from -"