I just started this game, and I am stumped. I can't find an answer in the manual, so here goes: How on earth do you "rest" or otherwise regain HP/MP on the cheap? I can pay Dr. Victor, but that is super expensive. MP items are also super expensive. Are there really no other options than those?

It's been a long time since I played this game, but I'm pretty certain Victor is your primary source of recovery. I don't remember the prices being particularly prohibitive though. (Especially compared to that demon/spirit that offers to heal you in dungeons.) If it is an issue it shouldn't be one for long. You might want to try looking for a demon with some dia skills to help.

Dia/HP are fine, but my demons keep running out of MP, and so I have to spring for Chakra chips at 600 yen a pop! :)

Wow, that title.

@joques: I might be thinking of King Abaddon, but I recall a weakness exploitation system where you would get free MP for attacking an enemy who is stunned by their elemental weakness. You might also consider focusing on some more physical oriented demons that don't rely on their MP as much.

Edit: I looked up a gameplay video to try and refresh my memory and I'm pretty sure I was wrong about the weakness mechanic, but I did remember that the game has tactics settings. As I recall, if you leave them to their own devices they basically just spam their MP skills until they run out, which is a waste. You're better off setting them to only use skills when you command them to. (Unless the enemy is strong.) MP should last much longer if you're using it more sparingly. Take advantage of physical demons on weaker enemies, as their basic attack should do good enough damage.

I've never played this but if it's anything like most other SMT games, you shouldn't be using Chakra Drops/other SP refilling items that often.

@zeik: Thank you for the tips. It was my mistake, Victor isn't as pricey as I thought. It just occurred to me that in SMT Nocturne, you also have to pay quite a bit to heal HP and MP at the Fountain of Life. I don't know why I reacted so much more strongly to it here than in Nocturne. Maybe because as you said, my demons just ran down their MP so fast while in Nocturne I had total control over MP expenditure.

I'll pay more attention to having them conserve MP. I don't suppose you can set "conserve MP" as default, rather than having to select it for every battle?