Rocket Town (Disc 1) - FF7 Walkthrough
Rocket Town is found to the north of Mount Nibel sitting out in the middle of a large field. It's most notable landmark is what the town is named after, the tilted rocket in the back of the town. While you're here it's highly recommended you purchase Gold Armlets for as many characters as you can - assuming you didn't steal them in Mount Nibel. These are probably way better than the items you have been using.
The Materia Shop in Rocket Town will have some new stuff too, Barrier, Exit and Time are all purchased here and Barrier is definitely worth buying. Even if you have the Big Guard Enemy Skill it's still useful to level up a Barrier Materia for later use.
If you speak to the man outside the Item Shop a few times then eventually he will give Cloud the Yoshiyuki weapon - which sucks but you can vendor it if desired for some extra gil. Aside from this weapon, you can find a Drill Arm in Cid's House (northern most building) and a Power Source in the western most building.
Yoshiyuki (man outside Item Shop)
When you're ready to advance the story forward there are two things you need to do, the first is go into Cid's House and to the backyard where you will find the Tiny Bronco. Cid's wife will introduce herself to you at this point too and tell you to speak to Cid in the rocket if you want to use the Bronco. Go north to where the rocket is and speak with Cid inside, ask him about the rocket to advance the story forward.
Fort Condor Battle #7: After speaking to Shera but before speaking to Cid, Fort Condor Battle #7 becomes available. If you speak to Cid the battle is missed forever. Get ready to do some super backtracking if you wanna do this battle
Rocket Town Story Steps:
1. Speak with Shera inside Cid's House (marked below)
2. Speak with Cid inside the Rocket
3. Return to Cid's house
4. Exit Cid's house (front)
5. Exit Cid's house (back)
Return to Cid's house to find Shera there and you'll trigger another scene. When you regain control of your character follow Cid and exit the house for yet another scene. After this scene you will have to go outback to the Tiny Bronco where you'll find Palmer toying around with it.
A comical boss battle will commence with Palmer - he isn't much of a threat at all and is easier than most random encounters in this area. After you defeat him there'll be another scene and at the end of this one you will find yourself in the ocean on the Tiny Bronco.
There are a few different things we can do at this point in time that don't involve progressing the story forward. The Wutai Side Quest has just become available and you can complete Aeris's Level 4 Limit Break - Great Gospel quest at this point in time too. If you'd like some advice on Materia Combinations I recommend reading that guide. Not really a side quest, but useful info for you at this point in the game.
What you want to do is up to you, follow the links below to whichever of the guides you want.
Fort Condor Battle #8: Now that you're in control of the Tiny Bronco, Fort Condor Battle #8 is now available for you to complete!