Mideel was a hot springs town in the southern part of the world of Final Fantasy VII. The town is known for being a place for where the Lifestream is very close to the surface. It is located on a large island south of the eastern continent.
The party comes to Mideel to hunt for their lost leader, Cloud Strife. Previously, Cloud had been possessed by their enemy, Sephiroth, and his mind had been badly warped. They still do not know if this person they have known since the events of Midgar is even the real Cloud, or just another Sephiroth Clone. Their lost comrade was last seen falling into the Lifestream at the Northern Crater. Since Mideel is close to the Lifestream, there is a good chance Cloud might have surfaced there.
Luckily, Cloud is found in the doctor's clinic. He had washed ashore a week ago, but has such a high dose of Mako poisoning that his entire mind has shut down. All he can do is sit in his wheelchair and mutter incoherently. Tifa Lockhart stays with him, hoping to somehow help out her childhood friend. The rest of the party goes off to fight Shinra for the Huge Materia, with Cid Highwind taking over role of leader.
Shortly thereafter, the town is badly shaken by a series of earthquakes. The party had returned to check up on Cloud and Tifa, only to get caught up in the destruction. Out of the ground comes the Ultimate WEAPON. The party does battle with the monster, but it flees shortly afterward.
A much bigger WEAPON, and with it a massive flow of the Lifestream both begin to erupt out of the ground. The entire town is destroyed in the eruption, leaving nothing but a puddle of Mako in its wake. Cloud and Tifa are pulled into the Lifestream.
During their time there, Tifa and Cloud both explore his subconscious to find out the truth. It is here that Cloud regains his true memories and awakens from his semi-comatose state. They both survive their time in the Lifestream and return to the Highwind with their party. Cloud returns to the role of leader.
Contain Materia - feed the Chocobo Mimett Greens, then scratch behind its ears.
Cursed Ring - go out the back door of the Weapons Shop, then cross the bridge, find a key around the house, use it on the door in the Weapons Shop, tell the guy the truth. Must be done before the town is destroyed.
When spoken to in his Mako poisoning state, Cloud will mutter on about Xenogears, another RPG that was in development at the same time as Final Fantasy VII. Interestingly, Xenogears also includes a reference to Final Fantasy VII by displaying a poster of Tifa in one of the in-game areas.
According to Final Fantasy VII Ultimania Omega, Cloud's rescue scene was originally planned to be even longer; after washing up on the shore of Mideel with Tifa, Cloud would have been unconscious and Tifa would have had to revive him with CPR. During this stage Cloud would have a vision of being experimented by Professor Hojo in Nibelheim, and of his escape with Zack. The scene was moved to be viewed in the Shinra Mansion Basement in the final version of the game.