Can anyone tell me what version control tool works well with 7.7.03?

Unless you want them to be integrated in Dev Studio, anything goes. If you do, none of them integrate very well, so we didn't bother with DS integration at all. Just mount the remote file-system over the network, that gives you a lot more freedom anyway.

Good options are subversion (svn), mercurial (hg) and git (although I have little experience with git).
Whether you want a central repo or a distributed repo (basically svn vs the other 2) depends on your requirements and the way you work. Both have pro's and cons and I have no doubts that there are elaborate comparisons on the internet