<?php

$flat = array(
    "7" => array(
        "id" => 7,
        "parent" => 6
    ),
    "6" => array(
        "id" => 6,
        "parent" => 5
    ),
    "5" => array(
        "id" => 5,
        "parent" => 4
    ),
    "4" => array(
        "id" => 4,
        "parent" => 0
    ),
    "3" => array(
        "id" => 7,
        "parent" => 2
    ),
    "2" => array(
        "id" => 7,
        "parent" => 1
    ),
    "1" => array(
        "id" => 7,
        "parent" => 0
    )
);

# transform $flat into a tree:
foreach($flat as $id => &$value)
{
    # check if there is a patrent
    if ($parentId = $value['parent'])
    {
        $flat[$parentId][0][$id] =& $value; # add child to parent
        unset($flat[$id]); # remove from topmost level
    }
}
unset($value); # remove iterator reference
print_r($flat); # your tree

Array
(
    [4] => Array
        (
            [id] => 4
            [parent] => 0
            [0] => Array
                (
                    [5] => Array
                        (
                            [id] => 5
                            [parent] => 4
                            [0] => Array
                                (
                                    [6] => Array
                                        (
                                            [id] => 6
                                            [parent] => 5
                                            [0] => Array
                                                (
                                                    [7] => Array
                                                        (
                                                            [id] => 7
                                                            [parent] => 6
                                                        )

                                                )

                                        )

                                )

                        )

                )

        )

    [1] => Array
        (
            [id] => 7
            [parent] => 0
            [0] => Array
                (
                    [2] => Array
                        (
                            [id] => 7
                            [parent] => 1
                            [0] => Array
                                (
                                    [3] => Array
                                        (
                                            [id] => 7
                                            [parent] => 2
                                        )

                                )

                        )

                )

        )

)