1. saw, was cycling.
2. were preparing, started.
3. were leaving, arrived.
4. were walking, heard.
5. didn't eat, were staying.
6. was drinking, didn't look.
7. droped, was putting.
8. met, was waiting.
Past Continious используется для обозначения длительных действий ( готовились, катался на велосипеде, ждал и т.д.), а Past Simple - наоборот ( увидел, встретил, услышал и т.д.)