Yup, you hit it right on the head of the Nail, Bart. That theory has to be right. I always thought that it was some other being carrying around parts of Jenova. but after re-playing parts where there is crucial evidence, I am convinced. Hojo's little Jenova Reuinion Theory proves it all. The real sephiroth cuts off the head of Jenova during the Nibelheim incident. He takes it with him when Cloud throws him into the lifestream. After this, Hojo is in despair because he cannot find his (son) ultimate experiment, Sephiroth. So, he devises a plan. By taking cells of Jenova and placing them into "weak" people that cannot handle Jenova, they will eventually lead Hojo back to the real Sephiroth. The Jenova body desires to be whole again.
So, five years pass after the Nibelheim incident. Zack and Cloud escape the lab in Nibelheim. During this, Zack tells Cloud everything that he missed. Things like his experiences with Sephiroth, and conversations that Cloud wasn't present during. That's how Cloud remembered what they said when he wasn't there. Although the limp body of Cloud seemed helpess and unconsciouss, he was listening. Eventually, the two get to Midgar. Zack is killed. Cloud finally regains consciousness to find Zack lying on the ground.
Cloud arrives at Midgar, and wakes up and sees Tifa. He says her name first, so I am convinced that he is the real Cloud. If he was "created" piece by piece, he would not have known Tifa's name before she talked to him. Eventually, Cloud meets up with a girl, Aeris, who is captured by the Shinra because she is an ancient. Cloud and his group go into the Shinra building and get captured while attempting to escape.
*This part is a theory*
Hojo proposes to Rufus to get something Rufus has longed for forever. Hojo plans to release Jenova onto Rufus's father, and makes it seem like it is all Sephiroth's fault. Rufus then becomes president. Since Hojo knows that Rufus is easily persuaded by Hojo's words, this is more beneficial to Hojo than Rufus knows.
*Back to what has 100% evidence*
Hojo releases all of his creatures (and headless Jenova), and signs his resignation letter. He gets the hell outta there. Jenova crawls out of her cell and drags herself up the stairs to president Shinra's office. She shapeshifts into Sephiroth just for show, and kills him with a "masamune". Meanwhile, with word of his father's death, Rufus heads over to the Shinra building to retieve his presidency. Rufus proposes to ally with Cloud, but Cloud refuses. So, Cloud and his group escape Midgar. Meanwhile, the headless body of Jenova goes ahead of Cloud and his group, beckoning him to follow...
And throughout the game the group IS in fact chasing Jenova. I am officially renouncing my 100% clone of Sephiroth theory, because that is not what Square meant by Sephiroth-clones. When the player reaches North Crater, the one they are chasing (Jenova in the form of Sephiroth) says that "This body is losing its usefulness". After that, the group fights Jenova DEATH, and retrieves the black materia. The headless Jenova harasses Cloud and his group for one last time about Cloud not being who he is. Why is this?
Jenova doesn't recognize the Cloud who threw Sephiroth into the lifestream as a person who was born. Cloud was pretty much "reborn" when Jenova was injected into him. Although Cloud's memories were muddled, and he hosted Jenova cells, he was still the same Cloud born in Nibelheim. Jenova thinks that Cloud is only five years old because the non-jenova-hosting Cloud was dead to her. I hope that makes sense..
After that, Cloud, Tifa, and another person appear in the same room where Scarlet, Hojo, and Rufus are. Jenova, disguised as Tifa, tells the one who holds the black materia to bring it to Cloud. Once that happens, Cloud becomes controlled by Jenova. He gives the real Sephiroth the black materia, and it all goes downhill from there.
Now, the real sephiroth obviously goes far down into the North Crater. However, I don't know what happens to the headless form of Jenova. Either she dies in the explosion, gets stepped on by one of the weapons, merges power with real-Sephiroth, or else goes into the North Crater to hang out with the real Sephiroth. I'm down with either one, but I like the one where she gets stepped on by Diamond weapon
If you want to re-live most of the evidence I just spewed, I have a savegame that is saved right before the sequence where the real photograph (Zack, Tifa, Sephiroth) is shown in the illusion-nibelheim. PM me if you're interested.
I think I summed it up pretty well. Thanks Bart, you gave me a real insight!