E3 2005 raised a lot of speculation when Sony revealed the Final Fantasy VII tech demo for the PlayStation 3. The demo featured what the 1997 hit, Final Fantasy VII would look like if it were to be a PS3 title. Despite it just being a tech demo and not a full out trailer, speculation still increased as gamers believe Square-Enix with conjunction to Advent Children is working on a Final Fantasy 7 remake for the PlayStation 3.
IGN managed to speak with Square-Enix themselves to get the information on this situation and this is what they had to say;
"Since the FINAL FANTASY VII tech demo at E3 2005, there have been a lot of rumors about the presentation hinting at an actual remake. While the June 2006 issue of Electronic Gaming Monthly confirms the remake for release in 2007, Square Enix has never stated this.
We have however confirmed that development has begun for Final Fantasy XIII and Final Fantasy Versus XIII on PlayStation 3. These titles are part of the Fabula Nova Crystallis Project which also includes a titled FINAL FANTASY Agito XIII."
This still doesn't resolve the issue either way, but it does support the side leaning towards improbable.