I love the way this thread has done a complete 180
I also laughed at all the people whose knowledge of Sephiroth seems to have come from watching Advent Children and reading fanboy arguments on the internet.
Anyway, I'd advise people to remember that "who would win in a fight" is a very different question from "who is the best villain", and that they are both very different questions from "which of the games in which these villains appear is the best"; only a five-year-old would confuse these things. Unfortunately, there are a lot of five-year-olds arguing on the internet, especially when FF villains are mentioned.
I'll admit to not knowing who would win. I've never played a game in which Kratos appears and I'm not going to make a decision about him based on what I've heard people say in forum posts or in YouTube comments; I know how badly Sephiroth's character and behaviour are oversimplified by people who have an agenda or don't know what they're talking about, so I have reason to believe that what I hear about Kratos might be inaccurate as well. If I get around to playing a game with Kratos in it to completion and pay attention to the storyline (which is unlikely), then I'll make some comments about who would win. I suggest that others follow my example.
I apologise for the overly serious tone of this post