RUMOR: Square Enix is developing a new PS2 action adventure game featuring Cloud from Final Fantasy VII as the lead character, and gameplay similar to Devil May Cry.

Hmm... are you referring to the animation style or the actual gameplay itself? Since Cloud will most likely be using his Buster Sword most of the time, the gameplay will probably much more similar to Tenchu (hack-slash stuff), but knowing Squaresoft, they'll add the usual RPG type of gameplay, im sure of it.

the gameplay itself ^^
i have a good feeling that the setting of the game will be on, before and after Cloud joined Shinra, the Nifelhiem incident