I'll start with the current issues I've resolved so far.
1) black screen after intro.
2) rendering the small playable cloud model when in cut sequences instead of the correct one.
3) Cosmo canyon crash.

All 3 of these problems seem to be caused by codec issues initially I had to hold up to get into the first fight or bring up the menu screen to solve issue 1. All 3 problems were solved by having the codec set up the way I do now which ment removing alot of codecs.

First of all your going to need some patches and Gspot
1.02 FFVII.exe patch
Chocobo Patch
Apply them both.

Now on to what I really want to cover I just mentioned the above So you don't need to go else where.

1. Download and install Gspot
2. Setting up your codecs to play correctly. firstly explore your disk or open the folder on your hard drive if you've copied the movies to play from there.
3. go into Start > control panel > add and remove programs. and remove any codec packs you have installed especially nemo and K-lite.
4. Right click any of the videos > open with > Choose Program > Select Gspot (you may need to browse your system for it)
5. Now with Gspot open Check under video that you have the correct codec.

6. Now we need to make sure no other codecs are interfering press button 1 under MS A/V in the bottom right what you want to see is the exact same writing appear in the box next to it as the image bellow. ignoring the 3rd line as though if thats the same as below sound sound be ok to.

7. Once the codecs are set like this you should have none of the issues I mention before.

If you need truemotion 2 codec it can be found on your install disc or downloaded here Though I recommend downloading the ace codec pack and installing nothing but the TrueMotion2 Video Decoder found under filters in the massive list your presented with in it's set up

If you have the codecs set up as I do and have errors possibly remove your true motion 2 codec and use the one in ace codec pack I'll try the one on the disk tomorrow evening and update.

The cause of my problem was there was an extra entry in the box between TrueMotion 2.0 and Video Render this was ffdshow performing something on the video which was causing issues you may have a codec doing the same if so right click > item details, now look for driver file and head over to delete the offending codecs.

Once you have only the desired codecs acting on the videos you should have no future problems.

Any issues or questions I'll be happy to take a look at for you.

If Gspot shows that your codecs are acting on these videos exactly as mine are try running the program in win 95 and win 98 compatibility mode found by right click on the exe and selecting properties.