IMO, i would rather combining A+A rather than S+S becos of the price to level up is so high and the Adena is hard to farm. Just keep the S to feed your rare eq (if you got) or save it for your future rare eq.

Its always adviseable to combine A eq compared to R eq to try to obtain rare (bcos of the cost) eventho the chance is smaller. Unless u have unlimited source of adena you can try to combine R eq to get rare.

If Im in ur shoes, i will keep all the unused eq (S and above) as a fodder and keep combining A for rare. But as stated from others before, this is subject to ur progress as well..if ur current char still can cope with the quest and mob...of course u can keep trying your luck to complete the rare gears. Else, you have to use ur resource to pump your current gear first.

For upgrading, sooner or later you may eventually upgrade the eq as you can get the stone via daily dungeon..it just a matter of time...