The story takes place two years after the end of Final Fantasy VII. The planet has become a peaceful place, industry and cities seem to be in ruins. However most of the surviving people have been affected by "Star Scar" syndrome (or Seikon-Shoukougun in Japanese).
Cloud has been living alone, likely having lost those who were his friends and companions in FFVII. He feels some guilt as to what he had done in attempting to save the world. Was it the right thing to do? Was it all worth it. He feels alone in the world as it is now.
In the trailers, we see Cloud riding through what looks to be the ruins of Midgar. He is attacked by an unknown attacker with what looks to be some kind of energy kind of weapon. A sword fight takes place between Cloud and this unknown enemy. The enemy has silver hair (although shorter than Sephiroth's) and wears tight black clothing.
We also see this unknown enemy bowing down to a person shrouded in a white sheet or cape from head to toe. He reaches out to take his hand and bows before him. A flashback of Sephiroth then appears on the screen.