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Run around in the forests in the Junon Area,Gongaga Area,Nibel Area,Rocket Town Area,Woodlands Area,Mideel Area,On Goblin Island and On Round Island

Better, more descriptive answer: Run around in forests looking for random battles. Every 10 battles or so you run into the Mystery Ninja. If you can't tell, it's Yuffie. Defeat said Mystery Ninja. A cutscene follows. DO NOT go to the Menu or try to use the Save Point or Yuffie runs away and takes 200 gil with her. Talk to her. When she asks you a question, you have to answer each one right or she won't join your party. If you answer all of them right, she joins. The answers are "Not interested," "...petrified," "Wait a second!," "...that's right" and "...let's hurry on." If you screw up, just repeat the process; she will appear again (and you'll get some bonus AP and EXP, too, of course, because you get those whether she joins or not.)

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