Combat occurs frequently, especially during the overworld travel. It is not until late in the game that it becomes possible to avoid combat during overworld travel. Combat comprises two vastly different settings: those encountered in ship to ship combat, and character to monster combat. Ship to ship combat occurs relatively rarely compared to the common character-combat. This encounter rate was reduced for the GameCube re-release.
Character combat occurs between one to four player characters and one to eight monsters or NPCs. Combat comprises seven main options: Run, Items (which can be used to change the characters' equipment as well), Guard, Attack, S.Move (Super Move), Magic and Focus. An eighth option, Crew Special, becomes available later in the game by meeting certain criteria (which replaces the Run command). After an action has been chosen for each character, the round will commence.
Ship combat is used when battling other ships and the extremely powerful gigas that are summoned throughout the game. Ship combat follows the same framework as character combat, however there are a few distinct differences. Each round in ship combat is divided into either three or four turns depending on how many characters are currently in the party. During each round, neither team has more than a single turn advantage over the opposition. Ship battles use a color-coded grid system to show each turn in the following two rounds, and the amount of fire the ship will come under during each turn.
The same actions used in character combat are used here, albeit with small differences. The 'Attack' option now has the player pick between four different cannons that have been equipped to the ship. Cannons come in three different types - powerful main cannons, multi-firing secondary cannons, and delayed-effect torpedoes - and each one can only be used once per round. This same stipulation carries over to the S. Move command, which now uses a large, front-mounted cannon. In addition to the standard actions, the ship's crew can be called upon by one of the characters in the party. Whilst each of these can only be used once in each ship battle, the diversity of the crew's abilities can be very useful.
Text from Wikipedia.org