Well, I decided to make it so that the player can get the Ultimate weapon from a character in a New Game+ esque style of replay(Pick a chapter from a lobby, then play it through again) and I was trying to decide the Drop rates for the ultimate weapons.

1:30 was my original guess, but then I thought that was too much. Seeing as every character has 4 peices of Unique equipment for them to get to become 'Perfect' Characters. Then I decided on 1:15, but once again I thought this was too little. I don't want the player to be able to get all the Ultimate weapons and Armour within a hour.

It really depends. For some loot game the chance of getting certain items is well under 1%, and those aren't even ultimate ones.
How much of a headache do you want to give completionists?

Should they really be droppable items? Since they're ultimate weapons, I think it would be way more fun if they were obtainable by completing optional dungeons, or by beating optional bosses, or even better by doing sidequest somehow related to the character...

Mindlessly repeating the same fights over and over is no fun at all, especially if you don't even have an idea of how much you'll have to keep doing it (which is always the case, if you use random chances).

If you really have to make them "droppable", rather than random chance, you could use counters; something like "you have to defeat 5 monster A and 6 monster B".

Or you could make the only way of obtaining the weapons is by acquiring items that do have a low drop rate 1:15, and also some items that may be from optional dungeons, bosses, or rare monster encounters that drop some other item needed to make the ultimate weapons. There doesn't need to be a blacksmith/alchemy system in your game, maybe a simple NPC that after some side-quests, offers to make weapons for you.

Well, The character recieves their ultimate weapon from a Mysterious Figure at the end of their customisation grid(Think Sphere grid from FFX)

My Plans:
A Character's Tier 9 weapon(PenUltimate)
2 Rainbow Shards(1:10)
99 Fire Gems(Gems are easy to get, 1:2 drop from almost every enemy)
99 Frost Gems
99 Lightning Gems
99 Gaia Gems
10 Spectral Cloaks
99 Magic Orbs(Brought from shops)
1 Dragon Scale
Level 99 Movement Levels(It's like levels, but you spend them)
Character Specific:

1 Magic Shard(Magi Only)
1 Slash Shard(Warrior only)
1 Knuckle Shard(Fist Fighter Only)
1 Cure Shard(Healer only)
1 Blast Shard(Desperado Only)
1 Omni Shard(Omni-Mage Only)


The results are:

Judgement Staff(+50% to all Non-Elemental Magic)
"Look at me now!"
Cosmos Blade(+25% to all Physical)
"Made with 100% real planets"
Crystal Fists(+50% To all Psysical, 2 Handed)
"They're not glass! I promise!"
Staff Of Health(+10% health healed when casting Heal spells)
"Makes Healing Feel...Nicer...Somehow"
Obliteration Ray(+100% to all ranged attacks; Turn delayed)
"^_^ Don't want to get on my bad side."
Omni-Weapon(35% to all styles)
"It's nice to be different."


Tier 8/9 are made in the Character Grid
Tier 7 are also found in chests, activating hidden switches and completing sidequests
Tier 6-1 are brought in shops.

So...It's a bit of a ballache to get them. But they can level most enemies in a few hits.

This. I always find this a much better way -- and much more fun -- than some of the other methods (espically since I've been replaying 'Chrono Trigger,' as of late.

The only Ultimate weapons I see fit as random drops are those for guest characters who only stay for awhile, though it may be better to put them into a random, well hidden box in a dungeon somewhere. Or just like you say, dropping them as ingredients for crafting or trading. Yes, the idea is interesting indeed.