Breeding Chocobos
Breeding Chocobos is one of the tedious, frustrating, and unnecessary (somewhat anyway) aspects of Final Fantasy VII. The main objective of breeding these cute, little creatures is to be able to travel in places where you cannot normally. Doing this seemingly impossible task will help you obtain the Knights of the Round Table Summon Materia.
First, you will need to procreate a Green Chocobo. To do this, visit the Chocobo Sage's (he is quite an eccentric and forgetful man-maybe he has Alzheimer's) House on the northern continent. Outside his house (or on nearby islands), you may come across large red creatures which you Steal from to obtain a Carob Nut. Make sure to get a few.
After that is accomplished, you will need to catch some Chocobos: a male near the Gold Saucer, along the shore, and a female near Mideel. Stable these and save your game.
Now, mate the two Chocobos you have retrieved and feed the baby a Carob Nut. It could take you many times to produce a Green Chocobo. If you do not get the Green one, hit Reset and keep trying (it could take what seems like forever).
Next, you must produce a Blue Chocobo, the opposite sex of the Green Chocobo. You can do this by breeding the original Yellow Chocobos again and giving the baby a Carob Nut. Let the Blue and Green Chocobos rest some.
Go to the Chocobo Sage's house, buy twenty Sylkis Greens, and give both the Blue and Green Chocobos ten Greens apiece. After that, race the two Chocobos until they are in Class A. Breed the two, give the offspring a Carob Nut, and (hopefully) you will end up with a Black Chocobo. However, this could take many tries.
Each colored Chocobo has its special purpose. The Green Chocobo has the ability to cross over mountains and the Blue one can travel over rivers and other shallow waters. The Black Chocobo can do both. There is still yet another Chocobo, the Ultimate or Gold Chocobo. To make him/her, breed your Black Chocobo with one of your Yellow ones. Give the baby a Zeio Nut, which can be stolen from the boxing glove creatures that dwell in the forest northeast of the Chocobo Stables, and, in time, you will end up with a Gold Chocobo. Best of luck!