NO, you can't programm Doom3 with DX 7.
Of course you can, DX7 allows you to plot pixels to video memory, therefore anything graphically is possible in DX7. The downside of couse is that everything would have to be calculated on the processor rather than the video card which may be a little sluggish even with modern processors.That said the real time raytrace demos are very impressive and as processors get faster they will look even better. These demos just throw coloured pixels at the screen, nothing to do with polygon rendering or anything.