Final Fantasy VII Guide - Walkthrough
Sector 7: At the hideout
|| Treasure:| 1500 Gil, All Materia, Ether. ||
In the next screen, just head left like everyone else. Here are several houses, but it's pretty clear which one the hideout is. Talk to Barret and he'll let you pass. We'll get to the other houses later. In the hideout, you get to meet (and name) Tifa. After the dialog, attempt to go outside and Barret will storm inside. After the dialog, talk to Tifa, and then head down. After the dialog and getting up again, another scene will take place. You'll receive your payment from Barret, 1500 Gil!
You'll wake up downstairs so head up and talk to Tifa and Barret. You can choose to take a Materia Tutorial (by explaining it to Barret). If you're not familiar with it, I suggest you do it. After this, exit the building. Head to the building on the lower right. There's a Weapon Shop here that sells Iron Bangles. Buy 3 of them, and equip them on all three your party members. Don't bother with the Assault Gun (which you have), or the Grenade (weak damage item). If you rest somehow, talk to the kid and give him 10 gold.
You can use his room upstairs. Go up, and into the room known as 'The Beginner's Hall'. This place can really teach you alot about the controls of the game. Talk to the dog for general info, and to the man to get a list of things you can choose from. Pick the blue All Materia on the right, along with the Ether in the chest that drops down. You can also talk to the guys on the crates about anything battle related. There's alot to learn here!
When you're done, head outside. If you want to rest in the boy's room (this costs 10 gil) head up the ladder. Otherwise, head to the building on the lower right. There, I suggest you buy one Fire Materia. You've got the rest already, and you don't need copies right now. One more Phoenix Down never hurts, and it also doesn't hurt to buy an Antidote or two. If you've got any Ether's, I suggest you sell them. They're worth 750 gil, which is a lot of money at this stage of the game.
As for Materia, I suggest you pair the Lightning Materia with All Materia on Cloud, and give Tifa and Barret the Restore, Fire and Ice Materia's. After this you can talk to the people outside, but all you need to do story wise is hop onto the train..