I feel VII-R is going to keep off rails from now on. Like it will keep some high points from the main game, but like others have predicted, I'm thinking this series is going to pull a Rebuild of Evangelion and eventually become something very different about the halfway point. Episode 1 makes it fairly clear that Aerith and Sephiroth know the events of the game, and even the rest of the cast are getting deja vu moments and seeing glimpses of the future. I'll be surprised if the games try to follow the original plot after the Aerith Death point.

As for the topic. I'm thinking they'll pull a Suikoden here and let you transfer stuff over but not everything. Levels will probably be set lower but having an old save will grant you slightly higher off the bat. Skills on weapons may transfer over, but I'm thinking they may be nerfed or capped so you'll still need to re-level them, and some materia will transfer over as well. Most likely the enemy skills you get will also transfer. But it won't be a 1:1 transfer. I bet the party will probably start at level 21 or something. 28 if you have maxed levels in Episode 1 and the game will likely need you to reclaim some materia or level them up again. I bet some quests will also transfer over and be continued in Episode 2, but only if you completed them in the first game.