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Sometimes when killing a monster, you get a part of that monster, which you can split into other items, or keep. Since I have no idea what they're for and splitting can't be undone, I've just been choosing to keep them.

What are they for? Should I be splitting them instead?

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Splitting captured monsters

Splitting captured monsters will result in components which can be used to upgrade existing weapons and shields and also craft new weapons, shields and accessories using recipes.

Keeping captured monsters

Not splitting monster parts means that you can sell the captured monster to different shops which will result in more money than splitting them would. Selling captured monsters will also unlock new items for purchase over time.

What should I do then?

With no components you can't upgrade your equipment, so its generally a good idea to split captured monsters until you have at least around 10 of the associated components before you start to sell them instead.

Also, some components can be rare which is also a reason to initially prefer splitting.

As stated above, besides money there is another reason to sell captured monsters. By selling captured monsters, you will cause new items to appear in shops over time. Each monster is associated with different categories and when sold, points are added to these categories. By accumulating enough points in a category, new items are unlocked, called trade goods.

For a list of unlockable trade goods, please see this wiki page.

To summarize, splitting should be preferred initially for crafting and upgrading reasons, but selling the captured monsters will net you more money and the availability of new items in shops.

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Are you 100% sure that selling captured monsters will cause new items to appear in shops? I really haven't noticed selling captured monsters have any effect on the change of items shops are selling when i was playing this game ages back. –  ChrisHateZ Dec 1 '12 at 16:03
    
@ChisHateZ Yes, while it doesn't happen immediately, selling captured monsters does cause new items to appear. Basically, each sold monster contributes by adding points to different categories and when a certain amount of monsters have been sold, new items are unlocked. This link explains how it works pretty well: lastremnant.wikia.com/wiki/Trade_Goods –  Merigrim Dec 1 '12 at 16:35
    
Does it matter which shop I sell the monsters to (will the new items only be available in that shop, or all shops? Also, I thought I remember hearing some shops pay significantly more for certain monsters - how do I know which shop?)? Are there any specific monsters I should keep or split, because, say, they are needed for a certain weapon/upgrade and I never get a second chance of capturing them? –  BlueRaja - Danny Pflughoeft Dec 1 '12 at 19:19
    
Yes, it's shop specific. It's been quite some time for me, but as far as I remember some will show them as out-of-stock or "invisible" at first. You don't need monsters for upgrades, just their components, so feel free to split if you're still missing some item (it's what I always did and never had an issue with this). –  Mario Dec 1 '12 at 19:30
    
As far as I understand, which shop you sell the monsters to doesn't matter. However, it is indeed true that different shops will sell different items. I could be wrong though. –  Merigrim Dec 1 '12 at 20:18
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