I can't believe so many people are mentioning FF3 in this whole discussion because there's absolutely nothing to compare between FF3 and FF7. FF3 for DS has fully 3D models and environments, and it did fine. FF7 had 3D characters and the occasional object, but completely 2D backgrounds. Yes, that's right. I have no clue what you people are talking about when you say FF7 is "fully 3D" but it wasn't in any way, shape, or form. The system could easily handle either method as has been shown. As people have mentioned, cutscenes would cause trouble. But then you have to consider the resolution of the DS screen, it's exponentially smaller, plus some of the more sophisticated compression methods that are constantly being developed. And, if you look at the tech. specs of the DS it's somewhere around or greater than a PS1 in power (though I have no idea how things like RAM would compare.) Nobody wins this discussion because all points are moot. The DS is limited yes. Companies get past those limitations, yes.
Like people have been saying (and this point is completely solid) the cutscenes add up, and a lot of the catridge space would probably be spent on them so I'd be hard-pressed to say it would be worth-while.
I don't even care about this discussion much, just the fact that people need to understand technology before they understand. An FF7 remake or port would be sweet though, but I could think of other games I'd way rather have moved over.
-Nick