There are two mistakes:
1. To compare a data-centric language with a database engine. If you choose sql7 you must choose also a language for the front-end (as VFP), because you can't do this with transact SQL.
2. With this amount of records, is ridiculous think in SQL as an option, I have a one millon record database and still not I decided me to make the change, because SQL is still slowest than VFP even using VFP database through ODBC driver in a client-server environment (perhaps I must review the transact code).

So, think good the situation and don't spend money. Think that when you really need a database engine as SQL Microsoft will be launching "SQL 20" and "VFP 19" and your "friend" will say that your system is obsolete.

That is my opinion

Pedro