First of all, I want to say that I love the Materia system, It's nice and spices up the Game.
Albeit, there are some cons of the Materia System that needs re-balancing such as:

-Materia Overpowering most U/U Items
-Materia takes a lot of Inventory Spaces
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I suggest to let U/U Items be Materialized, but with less probability of success (Maybe 50% less chance thant non U/U Item), but since U/U Items cannot be traded I am suggesting a [Materia Tab].

The Materia Tab would allow other crafters to meld the Materia for you, of course there are requirements for a crafter to meld another person's Gear/Materia.

What the Materia Tab should have:
-Exclusive Storage for Materia, Space:100-200/Limitless (Materia can be stacked)
-Let other players meld your Gear, Materia and Catalyst
-Meld menu works the same way with Repair Menu
-Player must prepare their own Materia and Gear for Meld
-Other Players can meld and prepare the Catalysts
-Set requirements for Melding the Materia e.g [Requirement] |L45-50|Leatherworker|
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This will not only help in the functioning of U/U Materia Meld but also help non-crafters to get their Gear melded easier without having to get them repaired to 100%. With this I also ask of SE to let Items not in mint condition (100%) to be traded and sold.

e.g.
Player A wishes to sell Item SFXY (Gear Condition:50%) at the price of 100,000 Gil
The Average price of SFXY Item is 90,000 Gil
Player A sells the Item SFXY at the price of 100,000 Gil with a reduced amount of 5000 Gil
[In the Price History]
95,000 [100,000](-5000) x1 26/12/2011 21:33
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I believe with the addition of [Materia Tab] It will really help with the Inventory Space, In order to further lessen the consumed space, SE can also make the Materia stack.

e.g.
[STR+8] [STR+8] [STR+8] [STR+7][STR+7][STR+6] Can be simplified into:
(x3)[STR+8] (x2)[STR+7] (x1)[STR+6]
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Add anything you would like to improve the Materia system, or maybe point out the Cons of the Materia Tab and what it lacks. I'll add and edit it and put the credits! I just hope SE will consider the Balancing of the Materia System