I haven't ridden any of the three, but I think that the concerns about the ZR-7S air cooled engine are misplaced. That engine has been around for a looooonnngggg time (as has the Bandit 1200's), and one of the points that magazines always make about them is that they are understressed.
The advantage to the Bandit is: lots of aftermarket goodies. Advantage of the FZ-1 : lots of power, OEM bags (coming soon to a dealership near you.)
ZR-7 : only a 750, may not have enough guts for two-up, depending on the size of the two!
Have to disagree about the VFR. Yeah, its good, very good, but it has been eclipsed. The Triumph Sprint ST out does the VFR on every front except one, reputation. The Veefer has been building its reputation for 10+ years! The Sprint ST handles as well, some say better. It has better range (250miles), more power, more torque, and is as comfortable. Some think the Veefer is more comfortable, some think the ST, so its a wash. The ST has factory hard bags available, and comes in three colors, not just one. The Veefer definitely has the advantage where the dealer network is concerned, while the ST has the warranty advantage (2 year, unlimited miles.)
Back to the Bandit, Fazer and ZR-7 though. Of the three, I'd be inclined to go with the Yamaha. I just saw a new FZ-1 parked outside a Big-O tire adjacent to a Wienerschnitzel that I frequent, so if its there next time, I'll try to find out the owner's perspective on the riding position.
As a disclaimer: I almost bought a Bandit 600, but ended up getting a Triumph Sprint RS. Considered the FZ-1, but a) it wasn't available yet, b) didn't like the plumbing pipe frame, and c) figured it had more power than I am ready for. The fact that I got the Sprint for a grand less than a FZ-1 didna hurt either!