It's south of gold saucer, in a small alcove or inlet. you may have noticed a dock that is next to junon- that is a submarine dock. you may not have seen the 2nd dock yet but it's close to the area where the sunken gelnika is.
sometimes a huge monster ('emerald weapon' is its name, i won't say anymore, don't want to spoil anything storywise) will be right infront of the ship. if it is- go back to the surface, then submerge again and it will have moved somewhere else most likely.
You can go anytime once you get the sub, but its best to do it anytime between when you go to find the "key of the ancients" and when you go to midgar to stop..something..from happening. this is because rude and reno of the turks will be there, and they each have a cool item to steal. but if you wait until disc3, they won't be there.
A word of warning: the monsters on the gelnika are tough and like to inflict status ailments, so use equipment and materia setups that defend against them,and hit'em hard and fast.
cheers.