QUOTE (Phantsmal @ Sep 14 2010, 02:08 PM)

I think the reason SE are so bitchy with fangames, is that they don't like thier stuff seen in other people's things.
Well, yes, there is copyright to consider. I'm sure none of us would like something that we made from scratch to be stolen from us and sold by someone else.
But for fan-made games given out for free, why would they care then? The answer is simple. Any fan made thing has the potential to become huge and well-known. It isn't likely, but the possibility is there. What if said fan-made thing was utter garbage? Sad as it is, some people out there wouldn't be able to distinguish the difference between the fan-made game and an actual Square-Enix game. They'd assume that Square-Enix was somehow involved in something so poorly made, which would hurt S-E's reputation.
For that reason, no videogame company can allow fan games. Because any given fan game has the potential to hurt the reputation of the original creator.
That being said, most fan games are never finished. And those that actually are finished only find their way into the hands a very small, niche population. In other words, S-E will likely never hear about your fan game. And even if they did, they would only care about it if it started getting a LOT of buzz, which is unlikely. And even then, they would only send you a Cease and Desist letter asking you to abandon making your game. If you continued to make it after their CaD letter, THEN they might take the matter to court.
tl;dr version: Don't worry about it.