Find: 1 Potion, All Materia, & 1 Ether

Watch Jessie detonate a bomb, then follow Barret up the stairs. Next you will talk to the flower girl; pick any options that you choose. Exit the screen, and you end up in a large open space. Go south, around the large fountain, and then west. Pick up the Potion on the left side of the screen. Talk to the man (if you want), and then exit south. Fight the soldiers for experience and money or run from them, then Cloud jumps on a train.
This scene starts with Jessie, Biggs, Wedge, and Barret talking. Cloud joins them, talks with them and then they leave. Follow them into the next train car. Talk to everyone. When you talk to Jessie, she will show you a map of the city and talk about the reactors, etc, then the train passes through an ID Security Check area. After this, have Cloud talk to Barret and at this time the train reaches the station.
The exit is to the left, and if you want you can save by going up on that screen. You can also take a peek at one of the pillars holding up the city by talking to the boy next to the save point. Now go back down and left to the AVALANCHE H.Q., which is also known as Tifa's 7th Heaven bar. Enter the bar, and talk to Tifa, and the little girl, Marlene. After naming Tifa, if you chose to buy a flower, you can give it to Tifa or to Marlene. Now talk to everyone else. When you try to leave the bar, Barret joins you and everyone goes downstairs to talk.
Then you go back upstairs and try to leave. Tifa follows you and tries to get you to stay. Pick either option that you prefer when talking to her. Watch the story. Then Barret will come upstairs to pay you 1500 gil for the mission. After you agree to go on the next mission, you go to sleep. Once you wake up, go back upstairs to talk to Tifa and Barret. You explain to Barret how to use Materia, (you don’t have to explain) and from here on, you can equip and use it.
Leave the bar after Tifa and Barret join you, and go down to the shack near the bottom of the screen, to the left. Buy any potions or Materia that you need or don’t have already and equip them. (If you need more gil, you can run back near the train station, and continue right. Fight the Sweepers, Guard Hounds, and Mono Drives here for experience and gil.) Exit the store, and run to the large building to your right. Buy three Iron Bangles from the man behind the counter. Equip them and sell the Bronze Bangles.
Go up to the second floor to the Beginner's Hall and talk to everyone. The dog explains how to use the buttons. Grab the blue circle, which is an All Materia by the boy on the right's feet. He then shows you a treasure chest, which contains an Ether you can keep. The kids beating each other up explain Limit Gauges. The lady in pink explains about Save Points. The three big guys on the right and the big construction worker by the entrance explain pretty much everything else. Also, now is a good time to move Barret to the back row with the Order command. He has a long-range weapon, and can dish out just as much pain from back there.