The advice so far is spot on.
Hopefully you DO have the War of the Lions edition - as the translation is cleaned up a bit, making the plot and story 10 times better and more coherrent. I believe it also took care of a few bugs and evened out the difficulty a bit.
You should always remember that you CAN replay battles that you've already fought - as well as fight random battles as much as you want. This is the "grinding" aspect of the game - and it will help you with the difficulty that DOES get a bit extreme (even during the early levels). My advice - if you run into a fight that you cannot win, change your tactic first, bring in different members and try to start the battle in a different way/direction - if that doesn't work, go grind out some more levels by replaying battles. The good part of grinding in this game as since it is a "strategy tactics" game, no two battles work out exactly the same way, so you won't get too bored doing the same thing over and over again.
Another bit of advice is to work on all of the classes - don't get comfortable with 3 or 4 great team members, work with as many as you can, grinding levels and finding all of their strength and weaknesess - that way you have a more rounded team when you need it, and also it won't seriously affect you if you loose a team member permanently.
Otherwise - have fun and keep on pushing forward. By the end of this game you WILL love it, just don't let some of the difficulty spikes stop you from playing.
Also - Find Cloud and resurrect Aerith!!!! It's the ONLY officially sanctioned by Square way to bring her back to life and actually complete the Cloud / Aerith storyline from Final Fantasy 7 - and one of my favorite side quests in the entire game.
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