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[*] Because they almost always depend on using the right element, you often have to give them worse armour than they could be wearing in order to give them the right spell. /list]
Yes, but this applies to everyone, not just wavemasters.
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[*] When it comes to Physical Immune enemies, you can just have non-Wavemasters with spells (seems unavoidable actually) or use Scrolls.[/list:u]
Likely you'll equip your characters with several element aligned weapons. By the fourth disk, all of my characters were carrying 3 different weapons that covers the widest variety of elements, then I switch in and out. You will, however, want everyone to have a healing spell. I didn't pay as much attention to armor as I did to weapons.
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[*] As far as I've seen, healing magic does a set amount of HP recovery. That means that it's just as effective in the hands of Piros as it is in the hands of Mistral or Elk. Actually, it's probably better in the hands of a warrior because they're tougher and you don't want your healer to keep dying.
[*] Some really good spells seem to appear on heavy armour or other non-Wavemaster equipment rather than on something the Wavemasters can use. For example, the heavy armour that has HP Regen and MP Regen on it.
[*] Taking all of the above into account, their dependence of MP is just another weakness that doesn't have many strengths to offset it.[/list:u]
While non-wavemaster can cast a curative spell, a wavemaster can cast a curative spell, rest a bit, then cast it again faster. At later levels, you'll see wavemasters regaining MP at a rate so high they can practically rain spells for the entire battle, rest a bit, then dive in to the next battle. In comparison, the scrolls are a resource that doesn't replenish itself. Instead of buying scrolls, I bought potions that restored MP (since said potions could also fuel offensive spells).
(slightly OT: the scrolls in .hack are truly crappy)
That being said, because there is no time limit to the missions (except for speed runs), there's nothing preventing non-wavemasters to just loaf around the dungeons while regaining MP, then just heal the party before going out to the next gate/room. Wavemasters just make the process quicker.
I'm certainly open to the idea that Wavemasters become useful towards the end of the series but at the moment their presence seems to be due to the "need" to have a magic class in an RPG rather than any actual gameplay based reason since they don't seem to fulfil a particular role that well in battle (or even out of it, e.g. teleportation spells are often something mages have in MMOs which makes them useful even out of battle but of course in .hack that would be pointless since it's not a huge, sprawling, persistent world but a collection of unlinked fields that can be returned from with a menu command).
Wavemasters in .hack feel like first ed AD&D magic-users and clerics. Extremely weak and borderline useless on the first levels, then on the later ones become like artilley pieces -- still weak but can lob offensive spells and healing spells.
Its also difficult to accurately represent wavemasters in the game. In the anime, BT was capable of parting mists and illusions around the Hule Cathedral. Such abilities would perpetuate the storyline but not combat.