Technically Nomaru and I think Kitase have confirmed that it was all Sephiroth all along in the Ultimania for I beleive Advent Children? I could be wrong but I'm pretty sure this was one of the plot threads the creators actually spoke out about because some fans felt the idea of Sephiroth being controlled made him a deranged but tragic victim but the creators want you to know he's just an evil guy.

To get this back on topic though, this is not a thread about who was in control it's about which would have made for a better story in your own opinion. I actually prefer the idea of Sephiroth being used by Jenova but believing it's his own plan because I feel it gives more depth to a rather flat character.