Basically, this is a true RPG. Meaning, each member can be specialized in something. Here's the only restrictions of each character:
Cloud: Sword, Short-Range
Tifa: Fists, Short-Range
Barret: Gun-arm, Long-Range
Nanaki: Hair Ornament, Short-Range
Aerith: Rod, Short-Range
Cait Sith: M-Phone, Short-Range
Cid: Spear, Short-Range
Yuffie: Shuriken, Long-Range
Vincent: Rifle, Longe-Range
Personally, it's good to have the Long Range Materia, so you can hit anything at any distance, even out of reach ones. Other than that, the statistically best party is:
Cloud: Duh, main character
Vincent: Long-Range, very efficient Limits.
Aerith: Healing, Mage-type character. But, unfortunately, can't use her throughout the game. So go with either:
Tifa: Limits build up.
or
Yuffie: Conformer is very powerful, and can be useful with Morph.
Hope this helped!
