The best combination for DW7 is Pete's Software plugin(or Peopts, which is mostly the same thing) and Eternal Sound GPU. If you get black screen errors, try pressing f4 to fix it. If that doesn't work, come back and post your complete specs, and we'll see if we can help you. Note: complete specs include anything you can think of, including, but not limited to, Graphics card, Graphics plugin, sound card, sound plugin, cpu, ram, cd rom drive, and no doubt other things I cannot think of at the moment. Ja ne!
I've also found that Kazzuya soft driver works well. But what could be your problem is the sound. disable sound and it might work, on my machine having sound enabled lost 10 FPS. and the sound is the same as DW6 so no big loss.
Ronin85, please do as Dark Watcher said and post your system specs. Dragon Warrior 7 works perfectly for me. Here is a screen shot to show you how it looks on my system. I know that screen shots belong in the Screenshots Forum and I have posted it there as well. Here you go.
You might, indeed, have bad copies. The only way to tell would be to get a hold of another copy (rent or borrow from a friend) of the same game. If it works and yours doesn't then your copy is, most likely, bad. But if it doesn't work either, then I would say that you have another problem entirely.