Ok, I'm going to finally reply to this thread now that things have cooled off a bit!

For ages I wondered what the significance guy in the pipe was but now that I've thought about it I reckon that he was just put there to introduce the tattoos which then keep popping up throughout the game to make you wonder what the hell they mean until you find out later. That's probably why Red XIII has one as well.

I think if it was Zack then squaresoft would give you a few more clues, I mean you could probably debate that Cid is Yuffie's grandmother if you looked hard enough and read into the game a little too far!