There is no doubt you will have trouble with this duo. It took me about 5 tries to finally take them down. Anyway, your primary target when you begin the battle is Yuffie. Do not worry about Leon for he normally walks to you. You've got plenty of time to smack Yuffie around a bit before Squall gets to you. When he does, just run or roll out of the way. You HAVE to focus on just Yuffie for now. The standard strategy for Yuffie is just move in and attack mercilessly (sp?). She'll stard flipping backwards and away from you in time to throw a shuriken at you. When this happens, you have 3 options: Dodge it, Deflect it by attacking it, Deflect it by blocking.
If you successfully deflect 3 shurikens back at her, she'll be knocked out for a little bit, allowing you to beat on her for a little bit.
So, when Yuffie gets close to dying, she'll power up and unleash a homing shuriken. This shuriken hunts you down for about 5 or so turns. It comes to you and if it hits you or misses you, it'll come back in a few seconds. Keep moving to dodge it. Just make sure not to accidentally run into Leon or you'll be sorry. Smack around Yuffie some more when the homing shuriken dissappears and she'll be down for the count in no time. Keep in mind that you cannot deflect THIS shuriken back at Yuffie.
Okay, 1 down... 1 to go. Leon's a total badass. He'll kick your ass in a second if you mess up. Make sure not to mess up. ;) Anyway, deflect Leon's standard attacks with either a block or an attack (preferrably a block, but I'm not sure if you've acquired it yet). If you successfully deflect an attack, you'll see a message in mid-air stating "Tech: #p" (you've gained a few experience for deflecting an attack) and you'll also notice Leon stagger a bit. This is your que to kick his ass around until you finish your combo. Continue doing so until his health is low.
When this happens, Leon also powers up. For Leon, however, his sword grows into a magical Lionhart which, at this point of the game, deals quite a bit of damage. Make sure your health is full before running at Leon. This time, you cannot deflect even his standard attacks. Just jump up and down and smack him upside the head until he's dead. It's easier said than done, however. Good luck.
As if he wasn't hard enough the first time, the beefed up Cloud once again takes you on. Boh. Cloud's attacks (at first) consist of standard attacks (short-range melee attacks) and an "impaling" attack (before he does this move, he jumps away from you and proceeds to yell before he does it). When it comes to the standard attacks, use the same strategy as Leon. Just deflect it and proceed to beat him up. When it comes to the impaling attack, however.... there's nothing you can do at this point of the game. You're more than likely not strong enough to deflect it yet, so just keep dodging it. But if you feel you are, go for it.
Anyway, when Cloud's health gets low he usually unleashes his super attack where he flies around on his one wing hacking at you. This move is VERY hard to dodge, so just try to BLOCK it (un-deflectable). Before he unleashes the attack he states "Farewell", so watch out for that. Once he's done with the One-Winged Angel, he'll be the same 'ol Cloud. Kick his ass.
Ask me and I'll tell you Nomura should have made Cloud the final boss for this Cup and named it the Cloud Cup. :p Yes, Hercules is THAT easy. Anyway, when Hercules is glowing yellow: he's invulnerable. If you're locked on (you should be), press L2 until you're locked onto one of the barrels that materialize before your eyes. run up to it and choose to lift it. Lock on once again to Herc and wait for him to show off (he always says "Give up yet?"). This is your que to throw the barrel at him. His yellow aura will be gone, which gives you time to smack him around. He usually fights back but it's usually not enough to take you at in one hit.
When he spins around just glide around. He won't be able to hit you. Also, when he runs low on energy he unleashes a sort of super attack every once in a while where he creates a shell around him that hurts you. It don't hurt you that much, so don't worry. In time, he'll be down for the count. A pushover, at most.
Hades Cup Note: This Cup consist of 49 Seeds. This is cake at first, but gets harder after each Seed... you'll see. After progressing through 10 Seeds, you are allowed to continue from that point if you lose. Rather, If you get up to the 39th Seed and lose, you can continue from the 40th seed.