I'm sure somebody has already posted this, but it remains my favorite FF7 parody. Brevity is the soul of wit:
Final Fantasy VII in 5 Seconds
EDIT: OMG... does anybody remember Final Fantasy VII / 2? (As in 7 half, the one based on Ranma 1/2)... I can't find it anywhere but that was my shit in high school (back in like 2004-2005)
Also another one I can't find, but like a nerd I printed paper copies of- The FF6 Comic. There's several now but this one was total parody using the sprite graphics (possibly even screenshots) and was pretty funny.