FAQ
Q. The game just hung for no apparent reason:
A. There is a problem with Xenogears in two particular scenes: The Dream sequences. What you have to do is go to just before this sequence, press F7, and then press F7 again afterwards. Some people, like me have no problems with it. Others have no end of trouble. If you can't get past this using the F7 key, try using PSXeven.
Also, in the first battle with Deus, it may hang for no reason. basically this is due to an attack he uses. Your best bet is to use a save state after each and every turn, and load it if it dies.