I heard during the beta that it was good to take these as a reward whenever the opportunity arose, but the question I have is, what should I do with them? I seem to remember someone saying you could trade them in for a different type of medal that can be turned in for some very nice equipment. Is this true?

You can trade them in for weapons, armor or mods on the planet that you have commendations for.

You can trade them in for rewards on the appropriate planet they are for, or at your faction's space station. They are not always the best thing to take as a quest reward. In most cases, you'll have more than enough by the time you are done with the planet to buy all the gear, mods, etc that you want. So take them when the other quest rewards aren't an upgrade.

 

You used to be able to trade them up in beta. For instance, 2 Tython comms for 1 Coruscant.

Edited December 18, 2011 by lolipon

Specialty vendors. Best place is to go to the space station and spend them.