Before I start I would like to let it be known that I did not create any of the mods in this instructable nor do I credit for them.
Some of the mods that I would recommend are:
1) Aali's Custom Graphics Driver (Allows you to increase the game resolution. It's also needed for most of the other mods)
2) Phoenix Rejuvenation Project (Changes most characters in the game from their blocky sprites to more lifelike ones)
3) Team Avalanche's Graphical Overhaul (Improves both 2d and 3d game backgrounds, GUI's, etc.)
There are a lot more cool mods that you can get (such as 9999 Limit Breaker, that allows your HP/MP/Damage go beyond 9999) but this instructable will only cover these four. If you want to look into more mods have a look at the Qhimm forums or go to FinalFantasy7PC .
Okay, so what you will need for this instructable is:
1) A PC. (Not a mac or Linux)
2) Software to decompress .zip files. (WinRAR is free and easy)
3) An official FF7 game for PC (Not the Ultimate version)
4) The official 1.02 Final Fantasy 7 PC Patch