What is Fusion?
Fusion is the process of superimposing the image of one item over another.  The image item gets destroyed, and the stat item does NOT change, except in appearance.

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What is needed to Fuse?
Three things are needed in order to Fuse.  A stat item, an image item and an Artisan Flame.
               

What is compatible in Fusion?

  1. Weapons
  2. Shields
  3. Hats
  4. *New* Capes
  5. *New* Masks

You cannot fuse a hat and a shield, or a hat and weapon, or weapon and shield.  Any shield can be fused to any other shield, any hat to any other hat.  Guns can only be fused with guns, but all other weapons can be fused to each other.  Innerwear, accessories, capes and pets cannot be fused.
*New* Capes can only be fused to capes, and masks only to masks.  Fusing them will not make them tradeable, unless thebase stat item is tradeable, just like everything else.  Timed capes and masks will stay timed if used as the stat item, but will become permanent if used as the image item IF the stat item is permanent.

I still don’t get it, how does Fusion work?
Ok, you have two items.  A and B.  Plus an Artisan Flame.

You fuse them.

Now you still have A, and B is destroyed, but A now looks like B.

Ok, so how do you do it?
Find Arlene first!  She’s in Paradise Shop and Megalopolis Shop.

Click “Let’s Fuse!”
You’ll get a screen like this:

Pick a STAT ITEM.  (Item A)

Pick an IMAGE ITEM.  (Item B)

If you pick an item that won’t work, such as a hat, you’ll get a message saying it can’t be done.

   

Place the Flame in the Catalyst slot (you can just hit Auto.)  And then click “Fuse”!  You’ll get a message asking you to confirm this decision.

When you confirm that yes, you want to fuse it, the two items will merge.  It will be sparkly!

Now you have this:

What about trading them?  Can fused items be traded?
It depends.  If the stat item was tradeable, then yes.  Otherwise, no.
Example:
This Gold Father Shield cannot be traded.

       

This Gold Father Shield was fused with the shield given out at Valentines, ’08.

       

Since the original, the Gold Father Shield, cannot be traded, neither can this one.

        

However, the shield fused for this demo, the Wood Shield + Ancient Shield, CAN be traded.  Because Wood Shields are tradeable.

       

Hope this guide has cleared up any and all confusion regarding Fusion.  Feel free to ask questions!
“Absolute Unique” items such as Shining Crystal gear and Pharaoh gear is not fuseable.

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Additional Guide Tips Welcomed!