Mode 7 (note the number, not the name) uses the teletext chip as found in early teletext capable televisions. The display is 40x25 characters with only 8 possible foreground or background colours. It uses just under one kilobyte of screen memory. As it is a text mode, you can only display the teletext chip's built in characters, but these are not simply limited to ASCII text. Some of the teletext chip characters are control codes that occupy a character cell on-screen. These can set foreground or background colours, flashing text, double height, invisible text or block graphics mode. Once in block graphics mode, some ASCII codes are transformed into simple block graphics in which each character cell is made up of a grid two blocks wide by three deep. This allows many simple shapes to be made. All control characters last until the end of a line. If you want to continue using the attribute you have set, you need to place those characters at the start of the next line.
Mode 7 was also the graphics mode on the Super Nintendo Entertainment System that let you do funky texture zooming and distorting effects.