OVERVIEW
Gaining new weapons and armor is an important part of getting stronger in Sword Art Online. In fact, equipment has the single largest impact on composite level.
All gear has a level from 1 to 1,000 corresponding to the weapon skill that governs it. For example, a longsword (12) can be used to its full potential by anyone with the straight sword skill level 12 or above. Using a weapon with which you have insufficient or no weapon skill with incurs a large penalty and is thus highly discouraged. From an in-game perspective, the handle might be slippery or the weapon might feel extraordinarily heavy. From a composite level perspective, you'll temporarily lose 20% of your overall level for each piece of overleveled gear equipped. In addition, any special effects the weapon may possess will be unusable until the skill level requirement is met.
HOW TO OBTAIN
Obtaining gear isn't easy in Sword Art Online. The occasional drop of equipment from your average monster isn't something you can rely on. Unique event quests and bosses are the best ways to get your hands on guaranteed powerful equipment.
Another more customizable approach is to craft the equipment with raw materials.
CRAFTING EQUIPMENT
The normal source of new items would obviously be drops from monsters or rewards from quests, however player crafting is the only way to obtain gear customized to your own personal tastes.
Materials are found from monsters or salvaged from old pieces of gear. All materials are ranked with a letter score from E to S. All E materials are common while S rank materials are extremely rare and always have special effects. Crafted equipment's level is based on the crafter's skill and the rank of materials used. If he or she so chooses, the crafter may choose any level 100 levels below their crafting skill level, otherwise a gamemaster will determine the level. More detailed information on crafting equipment, as well as the forms to do so, can be found here.