Square Enix showed for E3 part of a PS3 version of Final Fantasy VII, showing what the PS3 is visually capable of. Gamespot have an uploaded a preview of the demo, showing the opening sequences of the Playstation game in highly enhanced graphics. The demo was created by using a next generation advanced processor named "Cell".
http://www.gamespot.com/ps3/rpg/finalfantasyvii/index.html
Both Gamespot and IGN have given their own impressions on the demo, IGN very much saying that there will not be a remake of FF VII for the PS3.
Gamespots Impression
http://ps3.ign.com/articles/614/614692p1.html
Square Enix have updated their Japanese site with some screens of the demo.
http://www.square-enix.co.jp/e305/ps3/