Final Fantasy has its share of weird creatures--giant golden chickens, lions with snakes for tails, cactuses with eyes... It almost makes sense that an alien would show up at some point. Oddly enough, this Sonic Adventure Chao lookalike's name is PuPu. Before you ask, he is not found in a toilet like the Outlaws aliens, despite his unfortunate name--but I like the way you think.
There are four special battles you can encounter in Final Fantasy 8--"special" because you'll watch a UFO zip by. Trigger these events in the Heath Peninsula, Kashkabald Desert, Mandy Beach, and Winhill Bluffs, and you'll actually be able to take on the UFO in a fifth encounter. Once it's destroyed, return to the Balamb Garden crater to meet PuPu, the fellow who piloted the UFO. You can give him Elixirs or fight him; the choice is yours. You could eat him too, but that's just...strange.