To build Maiandra answer:
Materia is also used in the Relic Weapon quest (Novus) stage. Desirable Tier IV materia (Savage Might and Savage Aim) are a great Gil revenue source, as those usually sell for 350K - 800K depending on demand cycle.

The level of the item spiritbond will term with Tier of materia is produced.
Lv.1-29 - 90% Tier I, and 10% II
Lv.30-44 - 90% Tier II, and 10% III
Lv.45-55 - 90% Tier III, and 10% IV
Lv.70 - 50% Tier III, 50% Tier IV
Lv.90 - 30% Tier III, 70% Tier IV
Lv.110 - 100% Tier IV

An item will only gain spiritbond through usage. That could be crafting, gathering or combat. Combat produces the highest rate of spiritbond by far.
An item will only gain spiritbond on actions "near" the level.

E.g. Combat spiritbond gain
Monster level 25 and Item level 22 - this will produce spiritbond gain.
Monster level 25 and Item level 55 - this will not produce spiritbond gain.
This holds true for gathering and crafting also, just replace monster item level crafted/gathered.

The effective range -15 to +10 monster levels from the item level. Additionally, the closer to +10 you are, the higher spiritbond rate.
Other ways to increase spiritbond rate are:
The item is High Quality +20%
The item has materia melded to it; +20% per meld