I think if they were to remake FF7, it should be with HD pre-rendered backgrounds, and just re-done in-game sprites. We've seen Midgar in 3D (Crisis Core) and it's boring as fuck.
The battle system shouldn't be touched aside from maybe speeding it up and being a little "bigger" (more enemies in a battle, maybe even a party of four or five during battle, similar to olskoo FF).
I don't really care for FF7, but if they just touched it up, I'd buy it. They don't seem to have any problem half-assing ports of their pre-PS1 games, why not do the same for everything after?
I'm not saying it should suck, but whoever thinks making FF7 more like FF13 would be an improvement must be doing some strong drugs.