This is a very moving and interesting story which develops characters who are essentially the underdogs. They don't get the fireworks or the shooting stars and really that is a wonderful thing in itself. Nothing that happens to Xu or Quistis in your story happens with an excess of drama, not even Quistis' departure to save the world from Time Compression. Even that happens quietly as it no doubt would.
You develop Xu especially into a complete character and you give her a very insightful perspective on the goings on at Garden, one which makes perfect sense for her as a character who seems to be enmeshed in the running of the school. Of course she sees that Quistis is the more promising SeeD. When you point it out to the reader it makes so much more sense than finding Squall and Seifer promising, when they are always at each other's throats and are really such emotionally unbalanced characters, not the sorts of people who would make excellent mercenaries at all.
The small intimacies between Quistis and Xu are built up carefully and slowly. Xu expresses her interest in Quistis often with small ironic statements which I find very effective in her character. She always rather laughs at herself and the depths of her own emotions, as though she fears they might be inappropriate, as when she contrasts Quistis Trepe and SeeD Rank 8, not sure if Quistis can really be seen as a girl who she can fall in love with, or if she had better be kept at an emotional distance, in a professional capacity. Also Xu's invention of various extra regulations follows this same pattern. She has a dry sense of humour that is really delightful for her character. Regulation 109A is my personal favourite.
The story is also full of nice details like Xu's Guardian Force and the games of Triple Triad which the characters play together. I also enjoy the small detail that Xu writes Cid's speeches, but that he never actually pays attention and ad libs. It seems very like him.
The final chapter, occurring after Time Compression is very nicely done I thought, with its repetitions and the overlap from the earlier SeeD ball.
The final scene with Xu and Quistis kissing on the balcony was truly wonderful for being slightly antclimactic. Of course the kiss was expected and it didn't come out of the blue. Xu's humerous comment about the Forest Mongeese and her decision not to raise a fuss in the ballroom are all wonderful choices.
The best features of this story are I think the characterization and the resistance of the grand dramatic scene or gesture. Somehow, Quistis and Xu's sweet relationship with one another is comfortable and homely, even though it is set on the stage of a grand drama. I truly enjoyed this story.