Not who/what created time. Who/what created the timeline. You have a "set in stone" timeline. What determines those events? A flip of a cosmic coin? I happen to hate the idea of fate, and could go on complaining about it for more than an hour. This was not directed specifically at you, but rather at Square, if "fate" is indeed what caused all this. Let's not bring in another arguement as to why fate does/doesn't exist. My fingers won't last that long.
In any case, it's not a question relevant to the topic, as we don't have any possible ways of even beginning to answer the question.

Flawed. If time is set in stone, then going back in time and doing anything, including handing off powers, should be immpossible. Why should Ultimecia's handing her power off to Edea be part of this set in stone timeline, if no other time travel incidents are allowed? It makes no sense. If time is set in stone, then it is immpossible to change the past. Arguing that Ultimecia was always there to hand off her powers is only possible if you are arguing in favor of fate (and I now realize that I'll have to rail against fate at the end of this post). And even then, it is rather contradictory. If you cannot change the past, then you cannot change the past. And Ultimecia did, because if she (someone from the future) hadn't been there to hand off her powers to Edea (someone from the past), then Edea never would have had her powers. If you can't change the past, then Ultimecia should have been unable to hand her powers off to Edea, unless she was doing it in her own time. Arguing about a fixed timeline that includes time travel is about as self contradictory as you can get, in my humble opinion.
You missed the point. All timetravelling would also be set in stone, and simply be a natural part of the line of time. Because of that, Ultimecia doesn't change anything.

And again, who has said timetravel at other points isn't allowed? There could be many other events on the line of time which involved timetravelling, we just don't know about them. They would of course all be set in stone too, and thus would also not change anything.

Forgive me. I was making an assumption based off of your statements. I did not mean to say that time travel at other points is impossible, but that changing the past/future at other points is impossible. Why should Ultimecia be the only one able to effect any change on the past? I know, it's "fate", right? (Anyone notice a theme here?)
Flawed, as explained above.

1. Ellone didn't go back in time. She sent Squall and friends back instead, and since they didn't know how Ellone wanted the past changed, they couldn't do anything about it. Ultimecia went to the past herself. She knew what she wanted and how to get it.
But they had an affect on them, by giving them lots of powers. If they hadn't been in their minds, Laguna and co might not have survived the escape from that excavation site for instance.

In any case, I think Ellone realised that you can't in fact, change the past, and I'd take her word as truth. I mean, the characters speak for Square, so I'd take her saying "you can't change the past" as being serious, simply because the whole thing about wanting to change the past is such an important bit of the plot.

I have other reasons for believing fate exists, as I already mentioned, but since you specifically asked me not to, I wont argue further.

2. The time travel of Ultimecia to Edea's time to hand off her powers is actual time travel. Ultimecia went to the past. Ellone's method of time travel involves sending you back in someone else. So while her method failed to change the past, other methods may succeed.
I don't think we should seperate them. I mean, Ultimecia went back in time into Edea, and she was able to affect the world to a GREAT extent, as the game shows us. So although they are different ways of travelling to the past, they're both travelling to the past.

Of course, I have other reasons for believing the two ways are the same, as mentioned above, although I certainly aknowledge the possibility of the two being different.

As for the rest of your post concerning "fate", I won't argue against it. You're entitled to your own view on things. But personally I think it's obvious that FF8 uses the principle of fate, so I'll argue accordingly.
One thing though, I'm not saying "R=U because of fate" although that would be true, like any other event in the line of time. I DO present arguments for WHY she would become Ultimecia, just soyou don't think I'm saying "it's fate" to any question.