Just Reached Cumulative Level 9000....

[PeripheralVisionary]

and I never, ever, touched a red or blue upgrade stone. Ever. I'm serious. I desperately need a guide.

[Kenrichi]

Congratulations!
Only thing is, you don't need anything special to make it that far. You simply just need to level up and rebirth. Granted running special missions can be done faster with great weapons, but a party can remedy that.
Congrats again, I hope to see the community again if I can log in!

[Naxos]

Oh it's rather simple :

Red or Blue upgrade stones are stones that allow you to upgrade a weapon on a specific path. For physical damage (melee/range) Blue upgrade increase base damage, Red upgrade increases critical damage.
If your weapon is a magic weapon, such as a wand or staff, Blue upgrade stone will increase Magic Attack instead. Red upgrade still increases critical damage.
On cylinders, the alchemy damage type will vary depending on the cylinder type. Most of them are Blue upgrade based.

To start special upgrade, a weapon need to be Fully upgraded (5/5) and gem upgraded.

To do it specifically, you need to find a special anvil in towns (they're round, and lava flow in them). Special upgrade can be performed up to 6 times (currently more, but it's undocumented).
The first upgrade will succeed at 100% rate. The second and third upgrade have 50% chance of succeeding, and the higher ones are 45% (widely accepted as lower). Lucky upgrade stones trump those rates and are fixed at 100% until step 5.

If you fail a special upgrade, it reverts to a lower upgrade step (from 2 to 1 or 0 for example), and you'd need to upgrade back up. If you fail the step 5 to 6, the weapon is destroyed. If you hold the weapon dear, it's generally advised to stay at step 5. Upgrade stones of protection, again trump those odds and prevent the destruction of your item (or the lowering to a lower step). Note that they dont increase your chances however.

Special upgrade out of Normal stones is a costly endeavour, so be careful What you upgrade and up to which point.

If anything else confuses you, do post again and I'll do my best to complete my explanation xD

[Nani, The Hollowed]

WIKI IS THE KEY!!!

[PeripheralVisionary]

Well, I was hoping for weapons to upgrade. There's so many, but let's stick with the ones easy to get. I also like the repair fee to be amiable to my inconsistent gold flow.

Also, thanks for the explanation. Did not know you need a gem upgrade. :(

[Naxos]

Hmm, well it depends on your character's favored skillset and the skills you tend to use the most, can you tell us more ?

[PeripheralVisionary]

I prefer Bows and Cylinders.

[Naxos]

For bows, you would want Red upgrade stones, as the critical damage will be able to give you a fine amount of critical damage.

Cylinders, it depends on the type, but I think almost all of them benefit from Blue stones in a way that reflect the cylinder (Earthquake cylinder gets Barrier Spike health bonus for example, while the Red give critical as well). In the case of cylinder, a settled player that has established a solid base of stats can go for Red upgrade for strict damage. If you're after skill specific bonuses depending on the cylinder, then it would be blue.