Wow, on the Kefka front, I just got an idea of Kefka with all his godly powers being enhanced by Jenova cells, and that is scary. Let us hope those two never team up.
Anyway, I liked Sephiroth. I feel somewhat sorry that he never found out the truth about where he came from. The game might have been very different if he knew about Lucrecia and what Jenova really was. I also really liked him in Crisis Core (at least, as far as I've gotten so far). Seeing him as the hero really helps to expand his character. The Kalm flashback did part of that, but not enough.
Maybe he's not the best villain out there (and neither was Kefka, so there), but he was a dang good one.