At the crossroads go left, then right under the overhang. Go to the right over the arches to get to where Bugenhagen is. You talk for a while about the Ancient’s, the Planet, and Holy. You need the spiky object you got from the sea, which is actually a key to continue. If you didn’t get it, Bugenhages will stay here until you get it. If you do have it, it will create a waterfall and a short FMV will occur. Go across the bridge and you will see pictures of Aeris on the water. After Bugenhagen has finished talking, you can leave the Ancient City. You discover that the Sister Ray has been moved to Midgar. Make your way back to the Highwind. You see another WEAPON rise from the water near Midgar. Land the Highwind near Midgar and wait for the WEAPON to reach the land. You can now run into it to fight it…
Haste/Big Guard/MBarrier etc at the start. Physical attacks won’t work, so stick to Summon’s and spells. He likes to stomp on you a lot, so be sure to use Cure/All. Don’t use Demi or Bio. You can slow him too, and when you’ve hurt him enough he will use Countdown. If you kill him before the countdown ends, you win, but if the countdown does end, the Sister Ray will shoot him. Either way he gets shot by Sister Ray, but if you kill him, you get looooooooooads of EXP, AP and Gil.
Watch the FMV’s and after Midgar gets hit, you’ll be back on the HIghwind. You can go fight Ultimate WEAPON now or just fly towards the Northern Cave to get on with the plot. You’ll find the barrier is gone and that Hojo has taken over the Sister Ray. Now make your way to Midgar and fly over it. You will be on the deck of the Highwind. Pick your party and parachute into Midgar.