Wow, umm, alright. I'll give it my best shot.
There is one strategy that I've heard people use. They say to just glid around, slowly chipping away at their life one by one with Thundega. Except for Cloud, since he is immune to it. The good thing about Thundega is that you can do serious damage to each person from a far distance.
First things first. Equip Ultima Weapon. Most people have this weird urge to use Fenrir just because it has ONE more strength point. But think of what it doesn't do. Ultima Weapon gives you MP Hastega which is vital in winning this battle. (You can use fenrir if you'd like. But equip 4 or 5 Ethers so you can regain MP fast)
Alright, now onto the Abilites. Only things I suggest are having Thunder Boost, Glide, High Jump, Quick Run, and Aerial Dodge (All at level 3. Which, if your at this point in the game you already have) Next, I guess you can equip Trinity Limit. I didn't use it but appearantly it comes in handy in tight situations.
Just a warning. While your fighitng. Do not get cocky and run into the middle of the battle swinging your Keyblade thikning your Conan the Barbarian. They WILL kill you in a heartbeat. Also, while your gliding around, just stick to the edge of the arena. Cloud will start gliding around REALLY fast and he will hit you. When this happens, it's all up to you, I used Aerial Recovery fast and tried my best to counter.
Now to the good stuff Start the battle right away by jumping and gliding around. Try to lock onto Tifa and Thundega her annoying butt. She is by far the easiest one of the four to take down. I'm guessing maybe 9 or 10 lightning strikes and she's toast.
Next is Leon. Once again, don't try and do anything fancy. He's just as easy as Tifa was. Just glide, and Thundega. Say it, Learn it, and be friends with that phrase. Glide and Thundega. Watch out for his fireball though. You'll know when it's coming because he'll yell "here goes" and shoots it at you (it follows you too, so be careful)
Now, Yuffie and Cloud. These two are the most frustrating to me. You can;t hit Yuffie with a descent Thundega hit because she has Shell or something around her. Plust the fact that she disappears and re-appears everywhere is irritating. This is the part that you kind of have to go all out. And just Keyblade them. If one of them counters your attack Glide away as fast as you can. They will make you eat arena floor before you know what happend. Cloud isn't as difficult as Yuffie. Since it is very hard to land a full combo on her + a finishing combo. Wait till she says "This is gonna hurt" and sits in mid-air spinning her thing around and attack her. She should be gone in about 10 or 15 hits.
Cloud is actually amusing to fight and easily the one you want to shut up the most. His stupid moan gets exhausting after about 2 minutes of this battle. Now, he isn't a pushover. But it is extremely easy to land a combo on him. Try to get a ground combo. Since Explosion does several hits to him. The only real advice to give, is never stay still. His sliding attack is very accurate, and very powerful. Glide around until he does it, and take the oppurtunity to attack him as soon as he stops from his slide attack.
I know, I'm not the best at writing tutorials. So, if this doesn't help I'm sorry. The video is a bit more clear. + it shows you how =) anyways, i hope this helps some people.
lol. everyone.. Be happy. Rejoice in the streets once again..