How to actually use materia?

[EveK]

That is done by crafters. Once you sufficiently level a Disciple of the Hand class, you can obtain a quest from the same goblin camp to learn to meld. In the interim, you can have other players meld it for you (after talking to them, you right click the player and select "Request Meld." Remember to tip. =)

[TSLsmokey]

As an aside, one does not need to be a crafter to get the general ability Meld, but one needs to be the proper crafter class and level to meld materia to an item. The class required depends on the item.