It's fake, but knowing VII's popularity and the shed load of cash they'd make off it, I wouldn't put it past Square. If they do remake FFVII, they will not simply update the graphics. They will dumb it down, emo-fy the story and characters, probably re-write the script and reference the shit out of the whole compilation.
Short and sweet, we'll get a watered down husk made to sell to the slackjaws of todays current market. And yes, it'll be PS3 exclusive and 360 fanboys will whine and moan just like with MGS4.