Tough one, Photoshop 7 is almost 8 years old. I've to be honest, I'm not sure what you mean by font layer background color (UPDATE: now I know). A font layer is transparent by default, and the only color you can change is the color of the text/font itself (but I assume you know how to do that).

Layer effects were introduced in PS6 if I recall, but that's not going to help either because they are only affecting the pixels in the layer (here, the text).

In later PS versions you can transform a layer into a smart object, and apply the Invert filter to that smart layer; e.g. a black text on white would become a white text on a black background. Unfortunately, I tried and while you can transform a text layer into as mart object, you can't apply an Invert filter on it. An Invert Adjustment Layer with a layer mask is not working either. The whole issue here is that I don't think PS gives you access to the bounding box of a text layer. If you Control+Click on the layer, it will select the outline of the text, not its bounding box.