Ahh, actually, it’s pretty clear…if you see all the flashback videos. However, certain things have to be done at the right time to do so. Not all of Cloud’s story is revealed by default. It’s been years since I played the thing, so the details of the story are somewhat fuzzy.
I don’t know how much of it you saw, but you can google a complete explanation of what happened with Sephiroth, Cloud, and Zack.
Basically, Cloud is messed up because he thinks he’s Zack. As Zack gets cut down by Shinra bullets before the game begins (the timeline implies a few months before the opening scene), Zack in his final breaths tells cloud to pick up Zack’s sword and fight for both of them. Cloud does so but something inside his head snapped after everything he’s gone through in his life. (Really, Cloud’s history is pretty tragic.)
Cloud and Tifa were childhood friends in Nibelheim. Cloud always wanted to be a hero like Sephiroth. He dreamt about joining SOLDIER (Shinra’s special forces, of whom Sephiroth was a member) when he grew up. At 15 or 16, he went off to join them, but was rejected. Instead, he became a standard foot soldier for Shinra. This embarrassed him, and so when he returned to Nibelheim on a mission where Shinra went to investigate the reactor, he wore a hood and mask so no one would recognize him. Along on this trip were Sephiroth and Zack, an elite fighter who had become Cloud’s best friend during training and was accepted as a member of SOLDIER. Essentially, Sephiroth led the mission, while Zack was second in command. Tifa was their guide in the reactor. Sephiroth upon meeting Jenova went crazy and burned down Nibelheim, gravely injure Zack, and almost killed Tifa. Cloud in disguise saved Tifa, and later confronts Sephiroth, and amazingly enough, beat him, but suffered Sephiroth’s sword in his gut.
This is what really happened, and is what is revealed, IIRC, when Tifa becomes leader after Cloud falls into the Lifestream.
Originally, when Cloud talks about this scene, he places himself in Zack’s shoes (honestly believing that’s what really happened), but Tifa can’t remember him being there, and he doesn’t remember what happened when he (as Zack) confronted Sephiroth.
Back to the post-Nibelheim story. The injured Cloud and Zack are taken by Shinra to the secret laboratory that was under the library where they are infused with Materia, much like Sephiroth was. (Shinra is trying to create an army of materia-infused soldiers, essentially clones of Sephiroth.) Zack takes to the treatment much better than Cloud. (Once again, Cloud is the “failure”.)
Eventually, Sephiroth (who by this time has joined his mind with Jenova’s) and basically declared his own one-man war on Shinra breaks in to the lab and frees everyone. Zack and Cloud escape, but Cloud is rendered unconscious. Zack does all he can to protect his best friend, but gets ambushed just as Cloud awakens. The soldiers thinking Cloud is already dead, leave, and Cloud’s descent into insanity is complete.
Now one theme throughout the game is Sephiroth keeps referring to Cloud as a failed Clone. At one point in the game it’s even hinted that Cloud really was a Sephiroth clone (sometime after the laboratory is first dicovered). But the Lifestream reveals the truth, while Cloud was materia infused, he and Zack weren’t actual clones, unlike many of the others. But Cloud was a failed experiment in that he didn’t seem to take to the Materia infusion very well.
Now you most likely never saw the final Zack/Cloud video. The reason for this is you have to actually go back to the laboratory after the Lifestream scene. But there’s nothing that indicates this. It’s actually a very well done video and shows the bond that Zack and Cloud had.
