I have done it!!!!
Here's what you need:
1)80 min cd-r and a cd-r drive capable of
2)regular cd and regular cd-r drive
1)copy the disc as usual but make sure that DAO is active that way it will get rid of that 2 sec gap between tracks and this fits the entire cd on 1 cd. the software i used was CDRWIN and it worked fine.
2)compress thefiles with a software compression utility like WinRAR, use best compression and biggest dictionary size to compresse all the files on 1 disc. Ex:select all files on disc1 and create library. Burn to cd. do this with all the cd's except the install. Now get a program called FakeCD(this is a dos program but it works.) once you ff8 installed, extract the files from disc1 to your HD in a directory like c:\ff8.
edit the registry and search for datadrive(yes as one word) change this drive letter to a letter other than your existing drives.(DO NOT TYPE IN C:\FF8 CUZ IT WONT WORK!) Now save the registry file and install fakecd, once fake cd is installed edit your autoexec.bat file and insert this line:
fakecd c:\ff8 /L:x
now what this does is it makes a cd-rom drive called x in windows. X is the drive letter u specified in the registry. Save the autoexec.bat file and restart your pc.
then play the game, once you get to a certain point where is says insert game disc2, save your game and exit, then extract the next disc to c:\ff8 directory then reboot pc and play game repeat this until you finish the game.
That is what works for me.