Here's my suggestion. Treat this like a patch. The older content is heavily compressed whereas the new content is NOT compressed.
Keep your 06 and drag the V7 image folder into the 06 image folder as a patch.
DON'T OVERWRITE ANY IMAGES!
Next, drag the v7 rpy and rpyc files from the game folder into the 06 game folder and overwrite those.
It worked a treat for me! I switched to Linux and didn't keep saves so I didn't want to look at pixellated catherine.

And I like to count Hunter's liver spots too. So ha!
NOTE.. check for duplicates since some images were moved into V5 and V6 folder.
EDITED FOR CLARITY