Damnit... I really hate admitting that I am wrong, but I do so when I know that I am beat.
Ymeegod, I suppose you are right. FF7 was originally intended for an optical medium, and to change plans would have involved a huge change in plans. But I still maintain that FF7 could very well have been made for N64 had it been rewritten from scratch. Also, we have no idea what was made in the 3 years prior to Nintendo and Sony parting ways. In all likelihood, it was things such as story details, textures, and background art, which doesn't really help my case very much I guess. Bah, I am going to go watch the DVD I rented and stop fueling the argument against me.

Clock Nova, play some PSO, and decide for yourself. I don't own the game, so you shouldn't take too much stock in what I say. You can rent it from a video store, or you can play the trial version of the PC version.
EDIT: Dark Link, I am sorry, but much of what I said about the Nintendo/Square situation comes from multiple sources, and it's been a long time since I have researched what went on. I did try to seek out what really happened back in the day though, and that's what I gathered went on judging from the evidence and stories that I found. I don't think that anyone outside of Nintendo and Square know the full truth, but I think that what I posted is close enough to the "truth" for passing. I tried to leave out most of my opinions on the matter, leaving much of what was publicly available, such as the Square demotions, and Square's advertising campaigns.
EDIT2: BrianSLA: Star Wars KOTR being designed for Xbox == designed for PC. Look at it from a development perspective. Designing a game for Xbox involves using DirectX to code for specific hardware. Coding a game for a PC requires using DirectX to code for a general platform. The reason so many Xbox games are released for PC is that it's a very trivial exercise to port one game to the other. Microsoft was smart in a way for making a console that was PC compatible. They knew that they would never have enough support to make it on their own, so they "borrowed" games from the PC's library to make up the slack.