Where: First off, have Ariel in you party, you will need
Sebastian's help. Find the Dolphin in the Undersea Valley and have
the Dolphin take you up the current. Get ready for a semi-boss.
Fight the shark, not hard. Just be able to maneuver easily. Once
you beat the shark, find the big stone sitting there and have Sebastian
move it. Work your way up the tunnels and get ready for Ursula.
All you really need is plenty of ethers for Cure and other magic.
Don't worry about Ursula or the eels (just attack them if you need more
MP.) If the pot in the middle of the room is red, attack it with
blizzard and use fire if it is blue. Once she is stunned, hack away.
Repeat this strategy until she is defeated.
OH! I'm so stupid...I was just sitting here fighting Ursula and didn't pay any attention to the thing in the middle!