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Battle graphics and animations were great in FFVII, just like in all psone FFs. In the overworld and close-ups, the characters graphics were so-so. But by no means were the graphics horrible. I would say of inconsistent quality, but definitely not bad for an early PS1 game. I also played the PS1 version later on, it was slightly worse graphically. If I would compare it to Diablo, Diablo II and Fallout graphics, it would be slightly worse overall with lower resolutiion, but in some areas better. But anyway, these PC games were isometric, so they can´t be directly compared graphically and visually.

 

edit: About Disgaea, its one of the most stupid games I ever played.