The upscaling of the pre-rendered backgrounds looks shit on all of the platforms, regardless of whether you're playing the original PC version, the DotEmu/Steam re-release or the PSone classic version. It didn't look all that great on the PS1 on a CRT TV to begin with.

The best way to play FF7 is with the original PC version, using Aali's OpenGL driver, the FF7Music mod combined with the Remastered soundtrack and a tweaked interface. I really don't know if the Steam version works with those mods.

Unmodded...you're probably better off with the PS1/PSone classics version.

I wouldn't say that FF7 was a bad game by any means. I enjoyed it, and admit that I give it more grief than it deserves because of its fans who claim it was the greatest game ever (or such nonsense). It still wouldn't crack the top half of my list of games in the series, however. That being said, it was better than FF8.