As crazy as it sounds, you could create an alternate levelling chart for Materia and have the PC decide if he wants to spend earned XP to increase its power...
Alternately, you could just take X percent of player-earned XP and attribute it to earned XP for the Materia.
Slotted items are weapon-dependent; linked slots are up to the DM, but say there's an X% chance for linked slots upon discovery/purchase:
Plain Weapons/Armor get one slot.
Masterwork items get two.
Each magical plus of an item adds one slot.
Only unique/DM-created items have 8 slots.
Materia give players spell abilities. If you're using the XPH, you already have a Mana-driven "spell" engine that will most likely work as is. If you're using a superhero-type system, the Materia give the heroes whatever ability suits the Materia.
Materia give access to free feats, energy resistances, spell-like boosts, and unusual abilities any time the slotted item is worn/carried.
Stars (1-5) equate to the caster level of the Materia. These levels stack with caster level of the PC. Magic/Psonics are no longer limited by class or type; any class can use any spell, period.
1 star = +1 CL; 2 stars = +3, 3 stars = +5, 4 stars = +7, 5 stars = +9 (If you're using Psionics as your base, this follows their odd-numbered progression nicely).
Very important to note: Final Fantasy magic is all combat-related. "Useful" spells just don't exist.