This game has lots of issues that bar it from greatness. The story is told poorly, with lots of quick away shots to a character who says one line and the story sequence itself feels really jumpy. Its almost like before the game was released some crazy editor walked in and hacked out a third of the story sequence because it really does seem like you just jump from one plot point to another. This is really just disappointing because the background of the Island Nations and the story of the Rune of Punishment are all really great concepts and the game certainly has its moments but overall, the weak execution of the story just prevents the game from achieving its potential.
The characters are also poorly fleshed out which is really noticeable coming off of Suikoden III which did an excellent job fleshing out a majority of the 108 stars. Even characters who feel like they should be important, like your friends who leave the academy to help you, seem more like background characters than people who held any significant attachment to the main character. Most of the stars are eccentric but few are interesting beyond that. I daresay that recruiting Ted is probably one of the few highlights of the game for me simply for the nostalgia. Troy, in the beginning is presented as a major figure in the game but much like Seifer from FFVIII, he ends up meandering into a background stooge whose later appearances often feel more like the writers throwing him in for the hell of it because they kept forgetting he's there, as opposed to really fleshing them out and allowing him to take center stage. The whole final battle with him feels like the writer tying up a loose end and makes little sense in context.
The gameplay is also a step back, not even considering the downgrade of six man parties to a four member team, the game drastically reduces the amount of runes you have and really cuts down most character specific runes with only Reinbach III, Kika, Ted, and the Hero having unique runes with more colorful animations. The world is easily the smallest of all the games and the encounter rate is ridiculously high for the series which makes traveling without using Viki a total chore.
Still, to not be a total Negative Nancy, the new item crafting system certainly breathed life into both the trade system and the usefulness of the Blacksmith and new tailor character. I also love that IV took III's equipment sets idea and really ran with it with the major draw of customization being the acquisition of materials to build the complete armor sets to get the fancy bonuses. I really love equipment setups like this and its one of the few high points of the games design.