Jenova came down from "the heavens" a while ago, at the North Crater, causing the crater. She tricked a race as powerul as the Cetra into thinking she was their dead ancestors, then wiped them out - or close enough to it.

Does that not show how powerful Jenova is, and possibly how she got herself out.

But the question remains, why did she use Sephiroth as her puppet? And How could she do this being that Sephiroth was killed/frozen in Mako 5 years ago?
Well, she didn't chose Cloud, because he could resist her will - some of the time. At the start of the game when he blows up the reactor with Barret he freaks out - he is going against her will. The same can be said for when Jenova tries to get Cloud to kill Aeris, but doesn't succeed.
Sephiroth on the other hand, is a perfect puppet. He was driven insane by trying to discover the truth, and therefore has his own weird ideas about becoming a god. But, like I say, how could she use him after what happened? Before it happened, Sephiroth was a legendary swordsman. In the Nibelheim flashback, he totally outmatched Cloud's skill. In the first couple of battles at the end with him, he certainly lives up to this - but he is combined with Jenova in both. Jenova is defeated in the Safer Sephiroth battle, leaving Sephiroth on his own. Yet in the final battle, he is destroyed with ease - random encounters are often harder that that! Why did the legendary elite member of SOLDIER Sephiroth become weak?
He had to have died 5 years ago - and this is one of the "clones" in black hoods being manipulated by Jenova. Jenova makes everyone think that it is Sephiroth(remember what she did to the Cetra). The Black Hood - who I know nothing about, it could have been a member of SOLDIER or it could have been a failed experiment by Hojo, obviously cannot match up to Cloud. Yet, Jenova manipulates it into thinking exactly like Sephiroth would, with all his memories and thoughts. Proof? well, not much, but there are certain lines, like this one from Aeris's death. I assume people who haven't got that far are no longer reading after 6 pages of stuff they had no idea about, so no spoiler tags

Sephiroth: Ha, ha, ha...... Stop acting as if you were sad. There's no need to act as though you're angry either. Because, Cloud. You are...

Jenova: Because, you are...... a puppet.


Correct me if I am wrong, but that is Jenova's only line in the game. Why does she finish "Sephiroth"'s sentence? We are made to think she is calling Cloud a puppet, due to what "Sephiroth" says, but is she really telling Black Hooded man he is a puppet?