Location
The Caravan is one of the most useful things in Sf2. You can store extra players and items inside it. Getting the Caravan takes a while, so follow these steps:

1. Follow the directions on my walkthrough to get the Old Man. (directions continue into the second part of my walkthrough.)
   
2. Talk to the Old Man until he decides to go with you. (you must talk to him a few times)
   
3. Go to the Ancient ruins nearby Ribble. There will be a battle in this cave. The Wooden Panel is in this cave, inside a chest!!
   
4. Return to Ribble. Walk up to the huge tree in the center of Ribble.
   

5. Hit the 'A' button. Select "Item" then "Use". Choose the Wooden Panel. The tree will open, revealing a hidden shrine. Enter it. The Achilles Sword is inside.
   
6. Fight the Kraken battle, then continue to Hassan. Go into the big two-story house. (there are two of them - one has a priest in it, the other has Rohde in it) Talk to Rohde. He will want to go with you only if you have the Achilles Sword!!
   
7. Head west of Hassan. You will fight a battle right outside.
   
8. After this battle, continue west. You will see the Taros shrine. Enter it.
   

9. Fight the Taros battle. The Caravan is behind Taros. You will get it once you defeat Taros! (Remember: Taros can only be defeated by the Achilles Sword. It must be wielded by your leader. Taros will not be damaged by anything but the Achilles Sword)

Using the Caravan
The Caravan stores the party members not in battle and items. You may enter it by moving your leader directly over it and pressing 'C' or 'A'. Once inside, a menu will pop up. Either Rohde or Astral will ask you what you want to do.

Main Options:

Join - you may add a member to your party. This member must be waiting inside the Caravan. If you have too many characters in the party already, you will be asked to replace someone.
Purge - take someone out of the fighting party and put him.her in the Caravan. You may take everyone out except your leader.
Item - brings up the "Item" menu.
Depot - brings up the "Depot" menu. (below)

Depot Options:

Look - allows you to appraise an item in the depot.
Deposit - you may store your people's items in the Caravan Depot with this command, thus freeing up some pocket space for your characters.
Derive - take something out of the Caravan depot.

Note
The Caravan can also be used to cross small streams!! To cross the stream(s), simply walk towards them as if you were going to walk right over them. The Caravan will automatically help you across. You will not have access to the Caravan in cities! The Caravan is accessable only once you are out of the cities, ruins, caves, or kingdoms. However, you may have access to the Caravan in some cities (i.e. Desktop Kingdom, Galam).