Well this is something I think might be in high demand. Compounding as well as Reinforcing was I think the game concept that took me the longest to grasp. I think others have had some difficulty as well and so I thought it might be a good idea to create a reference for those eager to get on with things. There are quite a lot of things that need to be understood in order to be successful so I'm going to start off this reference with some basics and overtime will update this post so that it can be as thorough as possible. For now I'm going to resort to external links to get things started. So! Let's begin.

Here we have a wiki for Requiem that outlines the basics:
Upgrade System (Compounding/Reinforcing)

Theoretical tips:

From my experience there are possibilty some extra factors that can help your success. The thing that is absolutely the most important aspect to consider is that there is always a chance that your upgrade will fail. "Upgrade" meaning Compound or Reinforce. When compounding there is a chance to fail and if it does fail you will lose the item forever. So it's a gamble. With Reinforcing when you fail the item is not destroyed but you will lose 1 slot on the item for each fail. Again, a gamble.

Now here's where my whacky thinking comes into play. At the moment my Rogue is lvl 27. My Rogue has an Amplio Claw, Amplio Crossbow, Amplio Lowers, Amplio Boots, Amplio Uppers aaaaand an Meulier Gloves. That's for compounding. For Reinforcing I have 2 earings, a necklace, and two braclets that are Reinforced 2/2. The rest are at least 1/2 including all armor pieces. The point of me rambling on about what I have is to point out that in all of that I have only had 1 fail on a reinforce. I have not had a single item destroyed yet. Pretty darn good odds there. Insane most might say.

I've been following two rules made up for myself with regards to compounding/reinforcing and those are: