FOUNDATION ITEMS

Here is the deal with the new rare type of equipment called "foundation".
Whenever a dwarf artisan (warsmith,maestro) crafts an B or higher grade item, be it weapon, armor, jewel, there is a chance that the item will not be normal, but a special (improved) "foundation" version of this item.
Hence, I guess that in lower grades (D and C) the chance for bonus is to get 2 items instead of one.
If you craft such an item, then you can unseal its bonus by following these steps:
1) Go to the Merchant of Mammon and buy "Mammon's Varnish Enhancer" (VE) for Foundation items... for B grade Foundation items you need 1 VE, for A and S you need 2,3 up to 7 for S/S80 grade weapons. The VE cost is 100K adena (thankfully not AA)
2) Go to the Blacksmith of Mammon with the given foundation item and the "Varnish Enhancer" and he will unseal the bonus.

Now the general rule for the bonus on each item category is:
WEAPON
The weapon will get an extra special ability, which can be similar to Focus (extra Crit rate), Health (extra HP), extra max MP (most mage weapons get it) etc.
For special dual swords, you craft and unseal a "foundation" sword, for example a "Damascus - Lightning" and use it at the Mammon BS as part of the dual set. Then the Dama*Dama duals will have the "Lightning" foundation ability and you can enchant the duals to +4 and they will get their usual special ability as well (e.g. for Dama*Dama "Accuracy will increase by 6").
As another example, I recall the "foundation" bonus for the Kris (mid B- grade dagger, actually most/all? Foundation daggers get this); increased Evasion special ability, which can stack with its usual "Evasion" SA if you choose it instead of the popular "Focus"...or you give it the "Focus" SA and it gets increased Evasion from its "foundation" bonus.

Note that the "foundation" bonus is predetermined for any given weapon... you do not get any choices or random results after unsealing the "foundation" weapon. e.g. the Kris will always get extra evasion.

ARMOR
The armor piece will get a bonus similar to the armor bonus of the normal set, plus a bit extra. So for pieces of a robe set, the extra bonus is PDef, for parts of a LA set, the bonus is extra evasion, and for pieces of a heavy set the bonus is extra HP. Unfortunately a masterwork item does not combine with normal items as a set. Moreover, it does not combine with other masterwork items to create a set... it just gives the bonus by itself. So if you have a complete set of masterwork items, you get a bit higher bonus than the standard set, but no attribute modifications.
For example, a complete masterwork Dark Crystal Robe Set gives a total 18% casting speed increase instead of the normal 15%, but it does not modify the attributes WIT +2, MEN -2, so that the final result is that you get less casting speed with the masterwork set than the normal set. I have already read many posts complaining about this "feature".

JEWELS
I checked a few jewels and the "foundation" bonus may give extra CP or MP, resistance to poison or bleeding or magic etc.