The Potential Rank of a combined monster is determined this way -

New Monster's Potential Rank	=	Combined Potential of parents	+	Total of parents' Action Points

Combined Parents Potential - The Main breed will have more influence than the sub breed. Therefore, it is advised that you use the monster with higher potential rank as the main breed of the new monster.

Total action Points - The book literally says Total, not average. This tells me that the longer the parents live and the more positive actions they do, the greater the baby.

This means that if you really want to get nit-picky, then Age of the parents is a factor. A fully raised monster will likely have a ton of action points, whereas a baby will have 0.

Another interesting thing here would be loss of Potential Rank for monsters created through cheating. Since action points are not gained when you us a gameshark to create a maxed out monster, the combination of hacked monsters won;t be nearly as productive as traditionally raised monsters.

Is there some sort of cap for action points, or do they go up indefinitely?

Nothing is mentioned about a cap. basically, they will continue to rise so long as you do something productive. (Resting will get you nothing...)

Would you say it's possible to make a monster with a very high potential rank in one go? Do the scans say anything about minimum action point requirements? What do the potential ranks actually mean?

I am working on the translation of the Potential Rank paragraph in the combination section..

I finally found the kanji I was missing. Here is what the first sentence in the paragraph above the Potential Rank formula says -

"A Monster's 6 parameters are greatly affected by it's Potential Rank, you can get this rank up by combining."

The second sentence says that "Rank can increase from the parents in combination, but in order to increase the rank high, monsters with a lot of action points are required."

I'll work on the description of Potential Rank found in the Stats description to see if there something more informative there.

Oh, the note next to the picture says that the ^? icon on the combination screen indicates that potential rank will increase at least 2 full ranks.

The paragraph showing the actual rank icons basically says that the higher the potential rank, the easier it will be to raise the monster.

So we're back to square one; higher potential rank = higher gains.

Alright, I'm going to approach this a little differently. I'm going to try and make a new Suezo with an exceptionally high potential rank by combining two monsters raised without resetting, then perform my book-level gain comparison test again. If it's strong enough, I hopefully won't have to worry about combining it again and can reset freely.

My pixies combine to make a galaxy class monster. I will try to take that combo monster and raise it to prime. Then I will take a book level (1 star if I can) and raise it prime. I'll compare the two to see how their stat gains match up. Ideally, they will both be pure pixies.