Well, assuming the HMD is showing 90fps, a 7ms latency is less than one frame, so theoretically, it should be fine. But is it 7ms to just send the information wirelessly, or is it 7ms to compress, send, and then decompress that information?
It makes me wonder about some sort of non-uniform compression algorithm, they way nVidia's recent technology works that lowers the render quality of games around the periphery to save rendering power. If someone can devise a way to more highly compress video around the player's periphery where they can't so accurately see fine detail anyway, and preserve a less lossy compression for the player's center of vision, that would be a very good compromise.