Final Fantasy VII Walkthrough
2.11: The Lifestream
This segment of the game will answer all of your questions about Cloud's uncertain past. This is an important part of the game, and reveals pivotal information.
First, head to the town entrance at the top of the screen. Here you will learn some news on the arrival of Cloud, 5 years ago, in Nibelheim. After this scene, head to the left of the screen.
Second, you will find yourself in Cloud's childhood. Only a little information about the promise made 7 years ago will be found here.
Third, head to the top of the window at the bottom of the screen. This segment is about Cloud as a child, and why he wanted to join SOLDIER.
Head back the Nibelheim. The remaining questions you might have on what happened 5 years ago will be answered here.
All the bits and pieces will be put together and Cloud will be himself again, but he will actually be his real self, now. After Cloud and Tifa are brought back to the Highwind, there will be a meeting in the operation room. Cloud will inform his friends about what is going on, and say that he is going to continue the fight against Sephiroth and Meteor. Cait Sith will then inform you that there is some huge materia in the Underwater reactor in Junon; this is where you must go.
Also note that since Cloud has returned to your party, you can now complete the Chocobo sidequest.