The alchemy pot is actually a rather brilliantly designed item creation system. It works in a very simple manner: the player chooses two items to put into the pot (up to three items after an upgrade). If the two items can be combined, then the pot begins cooking, and an item is produced after some time. The pot even dings when the item is complete. If the items cannot be combined, then the pot spits out the two items immediately, and the player loses nothing. So, the system is very easy to use, and encourages experimentation.
The alchemy pot system also produces plenty of useful items. Many of the best items at all levels of the game can be created by the alchemy pot. For example, it is possible to take basic healing herbs (which can be purchased dirt cheap at any general store), and combine them in various ways to make strong medicine, rose-miles, special medicine, lesser panaceas and even greater panaceas (the strongest single-character healing item in the game). It is also possible to create unique and very useful weapons and armor from the moment the alchemy pot becomes usable.
On the other hand, the products of the alchemy pot are rarely unbalancing. Creating stronger weapons and armor is usually dependent on finding new components that only become available later in the game. For example, upgrading the snakeskin whip into the dragontail whip requires waiting for dragon-scales to become available in the game, So, the growth of equipment power is held in check to match the increase of challenge in the game.
Yet, I still find the alchemy pot bothersome at times. While it is a fun addition to the game, figuring out useful recipes can be a mind-numbingly hard task. While the game gives the player the recipes for numerous items, these recipes cover only a fraction of the total number in the game. Furthermore, the given recipes can be uselessly vague. While some recipes such as the Sage's Robe can be easy to figure out, others like the Magical Skirt can be very tricky. In the Magical Skirt's case, the given recipe says that the player must combine a grass skirt with two different "magical items". There are at least six different pieces of equipment with "magic" in their name, plus numerous other overtly magical items. And I would never have guessed that the actual recipe required a magic staff.
The problem is that some guidelines are necessary for the player to figure out what combinations are possible, since guess-and-check is not feasible in Dragon Quest 8. For one, there are simply too many possible combinations for a player to try them all. Second, items are too expensive for the player to have multiple spare items lying around in storage. Many combinations require combining equipment that the player might not have otherwise needed to buy. With money so tight in DQ8, buying spare equipment for the sakes of experimentation was usually not practical.
In this situation, the best possible solution is to use recognizable patterns to make item combination easier to figure out. To a certain degree, there are items in DQ8 that do follow clear patterns. Basic healing items can be made by combining store-bought herbs for example. Cheeses can be made by combining basic cheese with special mold. Cursed items can be combined with saint's ashes to create non-cursed items. Certain magic swords can be combined with accessories to make improved versions of the magic swords. Rings can be combined with status effect causing weapons to make status protection rings. Trends like these make it possible to anticipate possible item combinations and experiment along focused paths.
Unfortunately, most recipes in DQ8 do not follow such clear patterns. Instead, there are many items such as the scholar's cap, which is created by combining a pair of scholar's glasses with a magical hat. While the combination is logical, it's logic is based on the notion that the player knows that the finished product exists. There is no other pattern followed by other items that can be used to extrapolate this recipe. I only knew about it because it was one that the game gave me. Sadly, almost all armor and most weapons in the game are equally impossible to guess as this.
As a result of this, I resorted to looking at Alchemy Pot guides online to figure out recipes. Which I think is a bit of a shame.