Metal Gear Solid 2 is a stealth game. Avoiding combat is the best option. The enemies have stronger weapons, and there are infinite amount of them, and only one of you.
Sneaking Mode[edit]
When the enemy isn't alerted of your presence or if they are not searching for you, you are in sneaking mode, or normal mode. This is what you will start the game with. In this mode, guards are patrolling certain areas and some guards may be communicating with their commander of what they find via radio. If guards hear a noise, they'll come over to where the sound was and investigate. If nothing is there, they resume their patrol.
If you enter their blue field of vision or if they find you, they will try to call for backup, and cause the base to enter alert mode (once he finishes the voice line). If you exit the local area before they call for backup, you can avoid the alert phase. Otherwise, you will have to knock them out, and have HQ send in investigation team.
Even if a guard is knocked out, HQ may sometimes check on the guards to see if they're paying attention. If there's no response, an investigation team will arrive to check on the absent guard, which may cause the game to enter caution mode.
Alert Mode[edit]
When the entire enemy base acknowledges your presence. The enemy will try to kill you. You must hide or break line of sight to escape this mode. Exiting the area doesn't end alert mode, but it provides an opportunity to shake off pursers.
Evasion[edit]
When you escape the enemy and they try to search an area. You will need to be completely hidden from the enemies, either hiding in a locker or using a cardboard box, and hoping the enemy doesn't check.
Caution[edit]
When the enemy fails to find you, they will remain on caution status. It is still possible to sneak around in this mode, although there are additional enemies and they will be more alert. If this ends, the game goes back to Sneaking mode, with the extra guards heading to one of the area's exits.
Caution also starts if an enemy radios in after waking up from being knocked out (when circling stars disappear).