Can anyone tell me or refer me to a link that explains the converting and melding of Materia in detail. I unlocked these side quests last night, and I understand that I can covert gear that is 100% spirit bound and it puts the materia in my inventory. Then I saw the little guy that you can give 5 pieces of materia to and he does something with it but I don't know what. I put 5 pieces in and confirmed and then that big machine started running, but I didn't get anything back in my inventory from it.

I'm just looking for a better explanation of what that guy does with the materia you give him and also a guide for the melding for different disciples of hand.