Here's the short version. Gems are a way to add extra magical effects to crafted items. They drop from foes in a raw state, and can be crafted (cut into a usable form) by characters who have the appropriate skill and equipment. They can then be socketed into player-crafted items, giving bonuses and other effects. On the face of it, this is a pretty swish crafting system, allowing for customizability and a personal touch. There are serious issues with it, however.
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The first round of trouble came with invulnerability gems, which would be stacked in order to bestow incredible levels of resistance to damage. A patch put a stop to that, by decreasing the benefits the relevant gems provided. To quote raid scripter Drauge: 'The crafted gear had insane values, and had to be tuned back to it's intended values. Either that, or changing all the other gear in the world and make the raid bosses stronger. I'm sorry for the loss of your gems, but this had to be done.'
So much for the armor gems. The big deal now is with damage gems, and their effect upon PvP. The same process that nerfed resistance gems actually buffed damage gems, meaning that stacked damage gems are now allowing some players to deal monstrous amounts of damage. In PvE, that's not so much of a problem; in PvP, it's a very big issue.
While the PvP notoriety system has met with a mostly enthusiastic reception, some players think that there's no point in implementing the new changes until gems are addressed again, because they believe players with stacked damage gems will simply dominate in PvP no matter what else is done. You can see their point.
To make matters even worse, an exploit allowed gems to be duped. That exploit should now be fixed after today's patch (we've not received confirmation as yet) but as with the infamous Purple Rain incident, economic damage has already been done.
It's a sticky wicket for Funcom, and we're curious to see where they go with it. So now you know, and knowing is half the battle!
