Pretty much it goes like this:
-Thousands of years ago, a shapeshifting alien thing crashes into the planet.
-Kills off almost all of the Cetra.
-Cetra manage to put it into stasis.
-~30 years before FF7, Jenova is discovered, mistakenly believed to be a Cetra
-Inject soldiers and fetuses with cells to try to make a Cetra-human hybrid (doesn't work obviously)
-Jenova cells make everyone who has it super-soldiers. Sephiroth especially, because he was injected with it while still in the womb. (There's a certain cave you should look for *cough*)
-Main Jenova entity still dormant throughout all this.
-Cloud and Sephiroth go to Nibelheim, Seph discovers research logs that give him false info ("I'm a Cetra")
-Superiority_Complex.exe
-Kills everyone in Nibelheim, goes to reactor to free "mother"
-Cloud throws Seph into lifestream
-Sephiroth floats through lifestream, but can't be absorbed because of his Jenova cells.
-Sits long enough in lifestream to learn the truth of everything
-Decides to use Jenova to control its cells and destroy planet, giving him the ability to absorb planet's power when it tries to fight off meteor and become a god
-Has ability to exert influence over anyone who has Jenova cells in their body (all the clones and Cloud)
-Tells all their cells to make their way to north crater (where Sephiroth is)
-Cloud essentially does the same thing, but doesn't realize he's being manipulated until it's too late