I was sitting and random googling on old RPGs and then I found a few reviews on this particular game and it apparently got some great praise.

Anyway, after watching a friend play it and a few gameplay videos I wonder how well it runs on Windows 7 as well as how the game handles higher resolutions (I play at 1080p and if a game doesn't support it it will be come a centered square if I play in fullscreen to avoid memory management issues in window mode and distractions.) I also noticed the mouse cursor is a little iffy, you can't really move it quite fast and diagonally.

I'm going to go ahead and warn you now that this game doesn't support 1080p.

Basically, since it's a DOS game, it'll only run at a very low resolution. So you either have to stretch it (which generally DosBox will do, and it's pretty good at scaling) or put up with the black border/windowed mode.

Exult, which is a program designed to play Ultima VII, might help a little bit, but I'm not all that familiar with the graphic improvements it does.

OK, I'm fine with that as long as the game accepts fullscreen with a centered screen with whatever (high as possible) resolution it does support.

Anyway, how's the controls and bugs when it comes to new hardware/Win7?

I'm not too sure, cause I haven't played the GOG version yet (I did just pick it up though) but I am fairly confident that it is relatively bug free when using Exult. There's only one major Exult bug, but it is avoidable. (Basically you get an item that lets you fly, and if you fly over a certain dungeon with a certain floor switch a door closes and locks, breaking the game. A few other topics detail how to avoid this in full).

As for controls, it's entirely mouse based. I never had an issue with it the one time I played it. Some people find the mouse arrow can be a little sluggish/accelerated, but the game is turn based so quick reactions aren't strictly necessary.

Good to know. I also just picked up the GOG version, I will sure check out that Exult thing.