Great topic. I've contemplated Sephiroth's strange sense of motivation as well, though I think it can be pieced together and wasn't just tacked on. This might rephrase some of what you were saying, but...

My interpretation attempts to answer three related questions about Sephiroth's development:
1) Aside from reading that he was a descendant of the Cetra, why did Sephiroth's ego transition so quickly from being devastated to being confident and vengeful?
2) When exactly did Sephiroth learn that he was not an ancient?
3) Why did his plan of action - to seek the Promised Land, gain enormous power and wisdom, destroy the contemporary world population, and (likely) rule over every soul - essentially stay the same, even though his motives changed?

To begin, it doesn't take much deducing to answer the second question - Sephiroth learns the truth about Jenova when he is in the lifestream, absorbing the Planet's knowledge. And despite this revelation, Sephiroth keeps essentially the same plan, deciding that he is superior to the ancients anyway. Something about this doesn't make sense though: To stay the course would require quite a mental leap for Sephiroth - from taking revenge against the world for the Ancients' sake, to destroying the world for his own benefit. Sephiroth's intentions literally shift from a misguided justice to intentional malice. Yet this leap of moral thought doesn't phase him a bit - if anything, it makes his resolve even stronger. It would seem that from his breakdown onward, Sephiroth, subconsciously, is never truly concerned with 'setting things right'; rather, he is really only concerned with whatever would ultimately lead to the destruction of the world and his rise to ultimate power. This answers the third question but raises another: Why is Sephiroth so fixated on this single underlying goal?

One possible interpretation is that as Sephiroth learns more and more, he becomes increasingly deranged, self-glorifying, and thus more hateful towards humanity altogether. He is obsessed with the thought of their inferiority and his own entitlement as a superior being. And while I believe this to be true, I don't think it's the whole story. After all, Sephiroth is a very sensible man before the Nibelheim incident - yet in a short time frame, he completely loses it.

Let's take a look at the incident. The discovery Sephiroth makes in the Nibel Reactor shatters his ego and causes him to question his humanity. He is no longer confident in himself and no longer shows his past strength. Sephiroth then confines himself in the Shinra basement, and his research there leads him to the conclusion that he is not a monster after all, but rather a synthetic descendant of the Cetra. At this point, we would expect a sigh of relief from someone like Sephiroth - "The Cetra were human, and I'm a Cetra. Great. I'm basically human, I'm not a monster, this explains the special feeling I had as a kid, let's get on with our lives." But instead, he decides he needs to unite with Jenova and destroy the world as it is known.

From here, I cannot ignore the parallels between Sephiroth's motives and Jenova's characteristics:
>Jenova's constant goal is to feed on a planet's energy, ultimately destroying it // this is consistent with Sephiroth's intentions, which would only help accomplish this goal.
>Jenova has the power to influence those who are weak or weakened (e.g. Cloud) // Sephiroth develops his destructive intentions, as well as his obsession with Jenova, at a time when he is at his lowest - with a broken ego, questioning his humanity.

Given this, it appears that deep down, Sephiroth was indeed doing Jenova's bidding all along. This does not necessarily mean that he was being manipulated directly by Jenova in the same way as, say, Cloud was when he handed over the Black Materia at the Temple of the Ancients (and though I have not read much of the Ultimanias, perhaps this is the kind of manipulation they were referring to). Still, the Jenova inside him did take advantage of his mind at a time of weakness, causing him to 'inherit' the will of Jenova, a condition from which he never recovered. This remained a constant subconscious goal of Sephiroth, even though his surface-level motivations later changed. Sephiroth was not directly controlled by Jenova like some unconscious puppet; rather, as I believe Squall of Seed once put it, he in a sense "became Jenova."
(I'd like to note that Cloud falls into the same condition during the Northern Crater scene after having questioned his own humanity - though unlike Sephiroth, he does later recover)

Quote Originally Posted by Forsaken Lover
Maybe this is why so many people, myself included, used to buy the Jenova was in control idea. See, it would make sense.
In fact, a Jenova-Puppetmaster-esque interpretation is really the only one that does make sense, covering all the strange Jenova-Sephiroth parallels and appropriately conforming to the story's intricacies. The game tells us what happens to anyone with Jenova cells when they become weak or lose self-confidence. Why should Sephiroth be an exception? So with this interpretation, we have a solid explanation for Sephioroth's change in motivation without compromising the integrity of his characterization.


tldr: Sephiroth's subconscious=JENOVA's will; ignore ultimania, critical thinking is superior.