Here's a listing of ways to use materia to their maximum effect:

MATERIA CHAINING

To make a materia 'chain', get several materia that are of the same type and preferably, level. Equip them, then load up on support materia. For instance:

Comet + HP Absorb, Comet + MP Absorb

This produces a single casting of 'Comet' that will absorb both HP and MP. Materia chains can be doubled, too:

Counter + Steal, Steal + Steal as well, Counter + Deathblow

In this example, both Counter and Steal are doubled. This results in the character being hit, then stealing once, stealing a second time, then delivering a Deathblow attack. You can also supplement chains with other materia:

W-Summon, Titan + MP Turbo, Titan + Quadra Magic

For this one, you'll cast Titan eight times and will do more damage, because each Titan is being boosted by MP Turbo.

It isn't really a 'chain', but notice the bonus of this setup:

Shiva, Shiva, Shiva, Shiva, Shiva, Shiva, Shiva, Shiva,
Shiva, Shiva, Shiva, Shiva, Shiva, Shiva, Shiva, Shiva

What's the point? I can now cast Shiva 16 times in 1 battle (or 80 times in one battle if they were all mastered). Okay, so maybe it's not that useful, but it can be done :)

Let's see if you've figured this out by now:

Sneak Attack + Choco/Mog, Choco/Mog + MP Turbo, Choco/Mog + Magic
Counter, Choco/Mog + Final Attack, W-Summon + Counter.

What do you think?

Well, if you said it wouldn't do everything it looks like it should, then you're right. W-Summon won't react with Counter, Final Attack, or Sneak Attack, and because of this, a hit character would counterattack with Magic Counter + Choco/Mog, not Counter + Choco/Mog x2. It's always a good idea to test out a materia chain before using it in a crucial battle, etc., or else you may end up surprised (and dead)!

How about this one?

Fire + Quadra Magic, Fire + Quadra Magic

Again, this won't work the way it looks like it would. You'll just cast Fire four times, not eight or sixteen times. That's because similar chains won't work if they're connected to the same thing.

My current, favorite chains are:

Slash-All, Master Command + Steal as well, Master Command + MP Absorb,
Master Command + HP Absorb, Master Command + Added Cut

This makes my character attack all enemies, steal from all enemies, and absorb their HP and MP as well, all in one turn. Anyone who's left alive gets hit by Added Cut at the end.

Magic Counter + Restore, Restore + All, Counter + Deathblow,
Deathblow + MP Absorb, Mega-All.

In which, if attacked, my character casts Cure 3 on all members, then Deathblows all enemies at once and absorbs enough MP to make up for the casting of Cure 3. Bravo!

Here's a list of the pros and cons of materia (not all are listed because they are obviously useful or bad, like Gil Plus and Enemy Lure):

MP PLUS / HP PLUS

These materia can only increase your stats so high: 5 materia at 10%, 2 materia at 50%, and so forth. Watch to make sure you aren't equipping needless orbs if they aren't having an effect.

LONG RANGE

In addition to letting you attack from the back row without penalty, you can also attack flying/out of reach enemies with this materia equipped. Don't give it to Vincent or Yuffie, because their weapons have a 'long range' anyway. The same applies to Barret, but not all of his weapons are long-ranged.

MEGA ALL

This materia makes every battle command affect all targets. It comes in handy when used with magic, eliminating the need to attach multiple 'All' materias, and works well with command attacks. It also changes 'Attack' into 'Slash-All' but will cancel the effects of the Double Cut materia.

COUNTER ATTACK

Each time you're attacked, you'll make a normal physical attack, usually against the enemy that hit you, but it is sometimes random. Note that attacking does not imply damage; if you are drained of MP, or miss an attack or spell, you'll still counter-attack.

Furthermore, you'll counterattack once for every materia you have equipped. So, if you have 16 Counter Attack materia, you can be hit once and then will strike back sixteen times.

SLASH-ALL

Try using the Command Counter trick along with this and you can use Steal as well or Added Effect, etc. along with Slash-All! This masteria is really useful in such cases as Contain + Added Effect, since you can hit a group of enemies and (if you're lucky), petrify, paralyze and confuse all of them!

DOUBLE-CUT

Works nicely with the Command Counter trick, especially with Steal as well.

COVER

A great way to raise your Limit Bar, especially if you use a Hyper on yourself. Be sure that the character using this has high HP. And as long as he or she is covering others, it's in your best interest to give that person Counter Attack, Counter, or Magic Counter materia so that they can attack more.

HP<->MP

This materia has a very limited use, since it makes you incredibly weak. I suggest using it only for 'chains' of materia. At least use all your extra MP to cast 'Shield' on yourself so that you can stay alive for a while. This materia is good if you want to have a powerful magic user, providing you stick them in the back row and make sure that their defense is high.

W-MAGIC

Casting two spells in one turn may sound nice, but this works even better in long materia chains, allowing you to do the sequence twice. And if you throw in Quadra Magic, you're doing the whole thing eight times. On top of that (at this point, maybe you'll need HP<->MP afterall!), someone else can then Mimic it....

W-SUMMON

See W-MAGIC, above.

W-ITEM

If you want to conserve Remedies, but a character is say, suffering from 'Minimum' and 'Poison', then use this materia so that you can use the 'Maiden's Kiss' and 'Antidote' on them, one after another. It's also useful if you layer attack items (Fire Fang, then Fire Fang), or to attack enemies and heal yourself at the same time (X-Potion, M-Tentacles).

This materia also has a side-effect of duplicating items for free! The only requirement is that they have to be usable in battle. To do it, select the item you want to dublicate, then select another item (any item). Cancel that item, then choose another item, cancel that too, etc. Every time you cancel the second item, the first item in stock increases by one. That's right, infinite items!

ALL

Remember, this materia can work outside of battle (like casting Cure on all members at once).

COUNTER

Works like Counter Attack, but you will avenge yourself with the attached Command materia. Note that the 'Master Command' trick won't work with Counter, but you can equip multiple Counter materia for a repeating effect (i.e. get hit once and strike back with a Manipulate and three Deathblow attacks).

MAGIC COUNTER

Works like Counter, but using magic and summon spells. Use it in the same way.MP TURBO

Avoid this materia like the plague. It really isn't that helpful, even when mastered, and the MP Cost rate shoots sky high.

MP ABSORB

Support this with something really damaging, like the 'Master Command' trick, Deathblow, Knights of Round, etc. Only then is it really useful. This materia is a godsend if you're making a materia chain, because if the total damage is high, you'll ususally get back more MP then what it took for the casting.

HP ABSORB

The amount of HP you can win back just isn't enough to justify using this materia. Only good when supported by very powerful materia, like Knights of the round. Works okay if you do the 'Master Command, Double Cut' trick, but only if your attack power is high.

ELEMENTAL

In my opinion, not as useful as Added Effect, but it's still good. Not only can you use it to inflict extra damage on enemies, but try this on for size: if you give yourself a bracelet or accessory that drains that particular attached element, or put the same combination on your bracelet and your Elemental materia is mastered, you can attack yourself and get free HP! Elemental works well with Choco/Mog since it's the only way in the game to attack with the wind element.

ADDED EFFECT

This is IT. One of the most useful materia in the whole game. Until you find the Ribbon, attaching this to your armor along with Hades will make you immune to seven status ailments. Attach it to your armor and use Destruct and you can make instant death attacks. Even better, use it with multiple effect materia (like Mystify or Contain), and you have a chance of striking and hitting with all the listed effects! See SLASH-ALL for details.

SNEAK ATTACK

By itself, this is okay, but it really shines in a materia chain. For instance, try using the same materia (say three of them), attached to Sneak Attack, Added Cut, and Steal as Well. Now you not only got a free use of whatever was attached to the Sneak Attack materia, but a free attack and chance to steal, too. The 'Master Command' trick won't work with this materia, though.

FINAL ATTACK

This overhyped materia isn't that useful, because it won't always work. Otherwise, try linking it to Revive or Phoenix to keep yourself alive. Otherwise, it doesn't have much use, and as a materia chainer, it's useless, because you'll be dead at the end of your chain ^_^;

ADDED CUT

This is an okay support materia. Try it in a materia chain along with HP or MP Absorb in order for a higher damage/payback total. Works well with just about anything, but don't link it to a spell you'd use on your allies!

STEAL AS WELL

This is insanely useful if you use it with Slash-All and the Master Command trick. Otherwise, try using it along with a function that is under the influence of 'All' or 'Mega All' so that you can steal from everyone. If an enemy is hard to steal from, try the Master Command trick and Double Cut for two chances to steal (or Steal + Steal as well for two chances to steal).

QUADRA MAGIC

Another overhyped materia. Sure you can cast a spell or summon four times, but the effect is drastically reduced. It's passable if combined with W-Magic, though, and works good with percent chance spells (such as Choco/Mog's chance of paralyzing an enemy), since the chance is effectively quadrupled.

STEAL

Just your average materia, but lose it the moment you get Steal as well. 'Mug' is nice but is only really useful if you use it and Mega-All.

SENSE

Remember, after Sensing an enemy, you can see their current/maximum HP by pressing Select and highlighting them with the cursor. You really should use some support materia along with this item so that it isn't a completely wasted turn.

THROW

Believe it or not, the throw command isn't useful unless you've got lots of one item to spare, because the damage isn't too hot. Coin, on the other hand, is just what the doctor ordered, but you'll need lots of gil to use it. Try mastering and selling All or Underwater materia. After all, the latter materia lets you get as much AP as you want on it, and you can always get more by giving Guide Books to the man in Kalm Town.

MORPH

Only useful when used along with an Ultimate Weapon, since the damage isn't so drastically reduced.

DEATHBLOW

Works nicely as a last ditch attempt, but you're better off attaching this to Added Cut or using in in tandem with Mega-All.

MANIPULATE

Not only does this let you control an enemy (although enemy commands are usualyy worthless), but that enemy can't move or attack during that time, meaning that you can kill them with spells easily (they won't break free), and use them to hit speedy enemies (like the cactus men on Cacteur Island).

MIME

The biggest benefit of this is that you can use it without a loss of items or MP. This means that if one character has a good materia chain (say, HP<->MP, four Magic Counter materia and four Knights of Round attached), they can use it, and then you can do the same thing for no cost whatsoever (...as if any enemy could survive that). The one downside to this is that if (using the above example), that character ran out of MP halfway through, you'd only mime the successfully cast magic/summons and not the rest. Since 'Mime' will mimic something more or less exactly, you can use it to imitate using Mega-All plus Deathblow (but not Slash-All or 2x Cut). You can even mime your own limit breaks!

ENEMY SKILL

Not all of the enemy skills are useful, but the ones that are useful are really useful. After all, what spell works like Angel Whisper or Big Guard? And between ???? makes a great comeback attack. If you think searching out Enemy Skills is a waste of time, then you've got another thing coming to you.

MASTER COMMAND

Gives you a couple of commands...that's nice. What's slick about this orb is a little trick you can do: attach it to a support materia, then equip a Command materia that can't be supported, namely Slash-All or Double Cut. You can now use non-spell related support materia twice on one enemy or against all enemies, depending on what materia you use.

EARTH

Don't use it! The high MP cost isn't worth it when you could use Ice or Lightning for the same damage. Only good if an enemy is weak against Earth or strong against Fire/Ice/Lightning.

RESTORE

This materia and the All materia make a nice combination you should keep using throughout the game. Regen may seem useless, and it is, in normal battles. But in drawn out battles (such as most boss fights), this spell can keep you from death's door, since you'll have enough time to let it heal you round after round.

HEAL

Not really that useful, considering there are a number of accessories and items with the same effect as Heal's spells. Vaccine is especially useless, because it actually keeps you suffering from any status ailment you may currently have.

REVIVE

If your levels are low, this one is good. Life 2 is also very handy along with Final Attack or when fighting powerful enemies. But in most cases, just keep a clutch of Phoenix Downs on you--you can get a lot of them easily throughout the game.

SEAL / MYSTIFY / TRANSFORM

All of these are useless, except for Mystify's 'Berserk' spell, which is best used on allies with high attack power.

EXIT

If Remove didn't cost so many MP (or prevent you from getting gil when used), this materia'd be more useful. Get a Smoke Bomb if you need to run away from battles, instead.

POISON

Doesn't always work, but it's ability to cause continuous damage is nice, even if the damage isn't that high. Good for 'using and forgetting' about, especially in a boss fight.

DEMI

When it works, it works nicely. Very effective when used with All.

BARRIER

Should be used only until you get Big Guard. Reflect isn't a great defense because not all spells can be reflected, and in FF7, two people with 'Reflect' will bounce the spell repeatedly.

COMET

If your character's attack power is low, give 'em Comet and that's that. This materia not only inflicts non-element damage, but the damage itself is very high. Comet 2 should be avoided, as it is 4 times weaker than Comet.

TIME

Haste and Stop. 'Nuff said. Even Slow is useful in certain situations. Works nicely along with 'Added Effect'.

CONTAIN

Break and Whirlwind are this materia's key attractions; they do element damage and they have a chance to petrify and confuse your enemy. Equip this one to Added Effect as soon as you can. See SLASH-ALL for details.

FULL CURE

Skip it. C'mon, Angel's Whisper is better than this, even!

SHIELD

Invincibility? Sounds good to me. Shield's short duration and high cost reduce it's usefulness, but it makes a great comeback materia, especially if you've got one guy left who's trying to revive his or her friends.

ULTIMA

Not so hot--and the cost is way too high. Whatever else, don't link it to Quadra magic.

MASTER MAGIC

Support it with All or Quadra Magic and you can influence most of the spells this way.

SUMMON SPELLS

Well, Choco/Mog is good in the beginning, and Alexander is great for holy damage, as is Hades for the multiple status ailments. Otherwise, don't use these in battle (except for Knights of Round and Phoenix); attach them to your weapon or armor along with Element or Added Effect.