<< How would a 7 volt mod damage a powersupply? It is supplying 7 volts to the 7 volt rail, so instead of taking power from the 12 volt rail the fan is taking it from the 7.. Honestly, I doubt it does any damage whatsoever. >>
What 7v rail? I understood the 'Mod' as using the voltage potential between the 5 and 12 volt sources (12 - 5 = 7). If you were dealing with a battery source, or the voltage difference between two passive devices, there wouldn't be any problem. Using the difference between the two positive sources of an active power supply is something else. I'm not sure of any solid reasons for not doing it, but I would avoid it. I think it would be safer, and not much more difficult, to add a variable resistance (dimmer switch) to reduce the current flow.
D.