The World Without Sephiroth
Some points to ponder with regard to FF: Advent Children, and Sephiroth's place in it.
Kadaj, Yazoo and Loz: Clones?
Kadaj, Yazoo and Loz aren't clones. It's a given that all the Sephiroth clones in FF7 had been wiped out with the advent of JENOVA being destroyed in the Lifestream. Moreover, all the other Sephiroth clones manifested an absolute Sephiroth personality, from a greater degree such as the Sephiroth clone that killed Aeris, to lesser degrees such as the black-hooded clones found all over the towns. Kadaj, Loz and Yazoo have their own definite persona; while a lot of their personality seemed to be based from Sephiroth's - physically (silver hair, green eyes, left-handed) and mentally (some fighting styles, confidence), they aren't a total clone of the man.



Kadaj, Yazoo and Loz were first known to have appeared in the Northern Crater, where JENOVA and Sephiroth were destroyed, which is a big clue. This means that rather than being Sephiroth's clones, Kadaj, Yazoo and Loz were actually conceived from Sephiroth's cells. You have to remember that JENOVA could control individual cells, and that Sephiroth was injected with JENOVA cells in the womb, which made these cells a part of him, which he could also control individually. Also, Sephiroth's mind is strong; at the moment his body was physically destroyed, his subconsciousness and will to survive would seek a new host, this time letting his own cells split and grow into three men who resemble him. One day, he could use one of those three to be reborn again - and for awhile, he did.
Kadaj, Yazoo, and Loz were also referred to as the "Remnants of Sephiroth" / "Shinentai", which could be another clue.
The Return
Sephiroth was able to return, simply because his intelligence was greater than JENOVA's; in a sense, while JENOVA functions on a purely instinctive level to survive, Sephiroth's functions on a higher intellectual level, and he is able to dominate JENOVA's cells to plot and plan for his return.
The term "Reunion", as in FF7, is for when Sephiroth is able to merge all the JENOVA cells together and fashion a new body for himself, once again returning from the dead. Actually, Sephiroth didn't really die; like Aeris and Zack, his physical body was destroyed, but his spirit lingered on. His will forced his cells to regroup in the form of three new vessels: Kadaj, Loz and Yazoo. Through them, he hoped to fuse their cells with JENOVA's so that he could return. This was what happened to Kadaj in the Advent Children; he willingly allowed his cells to fuse with JENOVA's, despite not knowing if his personality could survive the procedure; the result of which was that Sephiroth was able to resume his own form.
Geostigma
Geostigma was the result of JENOVA's body mixing with the Lifestream when it was destroyed; JENOVA cells flowed through the Lifestream and infected people with it. The energies of people who later on die from Geostigma return to the Lifestream as the negative Lifestream controlled by Sephiroth. With this, Kadaj, Loz and Yazoo was able to summon beasts without materia; with this, Sephiroth was able to manifest (his body, clothes, masamune, etc.), and with it, to darken the sky during his fight with Cloud.
The Sephiroth Repetitions
This is a very small belief of mine. Sephiroth is far far stronger than Cloud or Zack or any living being in Gaia. He could have easily won every fight; the final battles in Final Fantasy Seven, the determining fight against Cloud in Advent Children, and even the events in Niebelheim during the events of the Last Order.
In Final Fantasy Seven, Sephiroth could have easily killed Cloud while he was weaker, or even afterwards in several different occasions; at the Temple of the Ancients, during the attack on Shinra, etc. Instead, he chose not to.
In Final Fantasy: Advent Children, Cloud was weakening in his fight against Sephiroth, and rather than deal the final blow and stab Cloud right through the heart, Sephiroth instead plunges his masamune on Cloud's shoulder, a debilitating, but barely fatal wound, and continues to taunt him instead.
In Final Fantasy: Last Order, Sephiroth dispatches of Zack, but chooses to ignore the Shinra soldier accompanying them, dismissing him as a threat. This Shinra soldier one day would become his nemesis, Cloud Strife.
Because FF7 was a game and Sephiroth the villain, it is necessary for the game developers to provide believable means to defeat Sephiroth, the game's acknowledged antagonist. Therefore, they made Sephiroth perfect in every way, but with only one fatal flaw: overconfidence.
Everytime Sephiroth faces off against Cloud, he never takes his opponent seriously. No matter how many times he is defeated by Coud, Sephiroth simply assumes in the next battle that Cloud is nothing more than child's play and can be easily defeated. This is why he never kills Cloud in Final Fantasy Seven, he does not deliver a fatal killing stroke on Cloud when he had his chance in Advent Children, and why he turned his back, unprotected, in Last Order.
The sad irony is: Sephiroth CAN beat Cloud. It is always Cloud fighting defensively against Sephiroth in their battles and never offensively; he only reacts to Sephiroth's attacks. Sephiroth is aware of this, and seriously underestimates Cloud in the process, subconsciously providing Cloud with openings to turn the tide in his favor - and Cloud, second only to Sephiroth as a warrior - is quick to take advantage.
This is the only flaw that Sephiroth has, and he never learns from it in the three known occasions he'd had (possibly more) of finishing off Cloud and his team once and for all. But with this fatal, stubborn flaw comes also a valid reason for his decisions not to kill Cloud: Sephiroth wants to break Cloud mentally first before finishing him off physically. Sephiroth demands the ultimate defeat from the man who has time and time again thwarted his plans; he wants Cloud first cowed and humbled before him, and it is only then that he can savor victory.
This is seen when he kills Aeris in FF7 to spite Cloud and give him grief; when he taunts Cloud in FF:AC, asking him what his happiness is so he can take it away from him, and when he ignores Cloud as a threat as seen in the Last Order, stabbing him again through the stomach instead of through the heart..
Unfortunately, Cloud has a strong will, possibly even stronger than his own, and until Sephiroth acknowledges his own flaw, he will be doomed to always being defeated by Cloud, again and again.
Is Sephiroth really dead after AC?
Nope. As long as JENOVA cells exist, Sephiroth will still be alive. At any rate, his consciousness will still remain. The JENOVA cells in Cloud was probably eradicated after Aeris' Great Gospel healing rain. That leaves the other SOLDIERS still alive, who has JENOVA cells in them.
Oh, and Vincent Valentine. His PS2 game, Dirge of Cerberus may deal with that theory further, once it's released.
The last lines that Sephiroth would ever utter in Final Fantasy: Advent Children would be: "I won't be a memory." That line may have more implications to it than one might realized.