I'm sure this will probably be something that SE will be doing a lot of work on when the game is actually released. I'm guessing they will have it degrade too quickly and then players will request that they make it degrade more slowly. Patches will make quick work of this as the need arises. I'm just hoping that the item needed to repair an armor or weapon doesn't get rarer as the weapon gets more powerful. That would be my only issue with this kind of system. If it happens to be the case, people are going to end up marking up the prices for the repair items.... I plan on repairing items for free if they have the items needed and if they don't, I'll charge twice the price to purchase the items. Hopefully repairing will give skill ups. Maybe it'll keep people from charging an arm and a leg for repairing your stuff.
I'm pretty sure any action you perform (including repair an item) would give you class skill exp. Otherwise people wouldn't even want to spend their time to repair for others. I'd read it somewhere that all the mats can be purchased from vendors or gathered from a gathering class, so I could foresee it people would do free repair if players provide their own mats. I also hope, and don't think it's going to be like that, that we don't need some rare items to repair in order to get some special power. I assume that people would need to repair their equipment pretty often, probably after every party, so if this is true, then I can imagine people would have to spend hours to stock up these "rare mats" to repair their gears to make them more powerful at later stage.
However, it would be interesting if it takes some "actual skills" for players to repair an item, not like just press the "Repair" button. I know that in mining, there's a "strength meter" which the player has to decide how hard he'll swing his mining to tool, and depends on his swinging power, he may or may not be able to get the mine out. So if something similar applies to repair, for example, NPC can repair an item up to 50%, and players are able to repair up to 100%, but depends on how skillful the player is, he may only be able to restore to 80% with the same amount of mats if he didn't use the right power or hit the wrong spot.