YouTube user TheJamster1992 has spent the better part of 6 months recreating Final Fantasy VII in LittleBigPlanet 2. The work covers many parts of the game including the opening sequence, battles and limit breaks, and was created using the same tools available to everyone else in the game.
The video clearly shows that anything is possible in LittleBigPlanet 2, providing you have the time and patience to create masterpieces like this.