Ready to breed some Chocobos and obtain some super-powerful Materia in FF7? You must be about halfway through Disc 2 before you can do so. The first step is to visit the Chocobo Farm and rent out all 6 stables. My first playthrough of Final Fantasy VII I managed to breed a gold Chocobo just relying on the Chocobo Sage's somewhat cryptic advice and Chole's interpretations, but this walkthrough should make it easier for you.
The Chocobo Sage can be found on the Northern Continent, hidden among some mountains. He's worth visiting just to pick up the Enemy Skill materia that his green Chocobo will drop for you. TIP: If you save Yuffie's Pagoda battles for Disc 2 or 3, then you can make sure you get Trine on this Enemy Skill Materia as well. Trine is the one Enemy Skill that can be missed. Anyway, back to the Chocobos.
You're going to need a fair amount of Gil to breed Chocobos. The easiest way to raise cash in Final Fantasy VII is probably to sell a mastered 'All' materia for 1,400,000 gil. Alternatively, you can buy a Sylkis Green from the Chocobo Sage, use the W-Item cheat to make it into 99, and sell them on at a nice profit, rinse and repeat. In fact, the real reason we need so much Gil is to buy Sylkis and Reagan Greens anyway, so you could get away just using the W-Item cheat. But selling a mastered All isn't a bad idea in any case.
OK, you've rented 6 stables; now you need to put some Chocobos in them. In order to breed a green (mountain) and a blue (river) Chocobo, you're going to need a 'Great' and a 'Good' Chocobo of opposite genders. The Chocobos you catch on the World Map all have their own rating, from Poor through to 'Wonderful'. Great Chocobos can be found at the Chocobo tracks in the Rocket Town area or the Mideel area. It doesn't matter which you choose. Just make sure you have your Chocobo Lure Materia equipped, and wander around the tracks until you get into a battle featuring a Chocobo. In the Rocket Town area, Great Chocobos will always appear with 2 Valron or 2 Kyuvilduns enemies. Any other enemies and it's only a 'so-so' Chocobo. In Mideel, only the Chocobos who appear with 1 or 2 Spirals are Great.
If you're killing the enemies the Chocobo is with in one hit, you should be able to capture it before it decides to run away, without using any Greens. If not, feed the Chocobo some Greens to distract it while you kill off the enemies. As a general rule, the more expensive the Greens, the longer the Chocobo will snack on them for and be distracted.
My advice is: capture one Great Chocobo. Hop off it and choose to send it back to the stables. Head to the stables, talk to Choco Billy and move the Chocobo in. We won't worry about this one's gender, we'll worry about the next one's gender.
Right, now to capture a Good Chocobo. You'll find these in the Gold Saucer area, and they always appear with 2 Spencer. If you want to be as sure as possible you have one of the opposite gender to your Great Chocobo, then capture 4 and send them all back to the stables. With 4 you'd have to be pretty unlucky not to get a mix of males and females. Anyway, if it messes up, just try again. Again, once you have the right gender Good Chocobo, talk to Choco Billy to move it into the stables.
We now have a Great and a Good Chocobo. But we're not going to mate them just yet. Chocobo breeding seems to work better dependant upon how well the Chocobo is doing at the races...in the Gold Saucer! So race your 2 Chocobos up to Class A in the Chocobo area of the Gold Saucer. Just enter races and keep winning and eventually you'll reach Class A. To help you with this, feed your Chocobos lots of Sylkis and Reagan Greens to up their stats (you can buy both from the Chocobo Sage). Keep feeding Greens until there is no improvement in the Chocobo (generally takes around 20 of either Sylkis or Reagan Greens). You can use the L1 L2 R1 R2 cheat while racing (holding these buttons down will refill your Chocobo's Stamina) to help you win.
OK, got 2 Class A Chocobo? Just one final step...we can't use just any Nut to breed them. We need a special 'Carob Nut'. You can get these from a monster called 'Vlakorados' near Bone Village on the Northern Continent. It looks a little like a dinosaur. If it won't drop the Carob Nut after battle, just Steal it from him.
Now that everything is finally in order, it's time to mate! Using your Carob Nut, you should soon have a bouncing new green or blue Chocobo. Time now to take a break, as you can't mate 2 Chocobos again straight away. Do some other sidequests, fight some battles, whatever (make sure you fight at least 10 battles though). Before breeding again, you're going to want to save your game, so you can load up and try again if you don't get the other colour Chocobo of the opposite gender (and don't forget to use another Carob Nut). The green and blue Chocobos have to be opposite genders, because we're going to mate them to make the...
You get a black Chocobo by mating a green Chocobo with a blue Chocobo, again using a Carob Nut. Make sure your green and blue Chocobos are both Class A before you mate them. Once you have the green Chocobo, you can already pick up a Materia from the World Map that was previously inaccesible: Mime Materia from the Southern part of the Western continent.
Then once you have the black Chocobo, you can pick up the HP < - > MP Materia from the desert area near the path to Corel, and Quadra Magic Materia on an island to the East of Mideel. You see, the black Chocobo can cross mountains *and* rivers, as well as shallow waters. Remember, all of these World Map Materia are located in caves.
Breeding the black Chocobo is relatively straightforward as soon as you have the green and blue. So let's move on and find out how to breed a...
Step one is having the black Chocobo, which is already done. Now we're going to have to capture a 'Wonderful' Chocobo. These are located on the Chocobo tracks near Icicle Inn, in the Northern-most continent. The Wonderful will always appear with 1 or 2 'Jumping' enemies (the rabbit type creature) only - if you get a rabbit and a wolf, it won't work! Capture 4 and send them back to the stables, again with the idea of getting a mix of males and females, so we have one that's compatible with your black Chocobo.
Once you have a Chocobo of the opposite gender and you've moved it in to the stables, the next step is to once again race the black and Wonderful Chocobos at the Gold Saucer (don't forget the Sylkis and Reagan Greens!). Except in this case, we're going to race them all the way up to Class S, the Class above Class A.
One final step before breeding. In this instance a Carob Nut won't do. We're going to have to use a 'Zeio Nut'. You get these from Goblins on Goblin Island, an island located towards the North-East of the World Map. If the Goblins aren't dropping it after the battles, just Steal it.
OK, mate the black and Wonderful Chocobos using the Zeio Nut. You should now be the proud owner of a gold Chocobo, or a mountain-river-shallow water-ocean chocobo. Take your new Chocobo across the ocean to the very very North-East of the World Map, near Goblin Island. Here you'll find an island you can't land on with your airship, as it's all forest...and one cave. Inside the cave you'll find Final Fantasy VII's ultimate Summon Materia, Knights of Round. Woohoo!
Your gold Chocobo should also be very fast, great for winning races. Spend some time collecting the various prizes at the Gold Saucer.