When you begin the game and can move around in town, go outside the town (to the west). Go down the stairs, and open the treasure chest that has 1000g. Go back to town and add a priest with the "Getting allies for your party" hint. Then, go to the other woman (on the right). You must enter the H rank coliseum. Do this as many times as desired. After you have reached the desired level, go to the palace and start the first quest.
To unlock the Machine race you will have to walk back and forth a lot. First, complete the "Undiscovered Land" quest to gain access to Hokabi. Then, do the "Unopened Gate" quest followed by the "Important Key" quest, which will let you go to Fortmas. Do the "Secret Route Open" quest to let you teleport from Biblos to Fortmas and back. Next, complete the "Top Secret File" quest followed by the "Contest" quest where a samurai named Kyo will join. Next, do the "New Guild" quest, which will let you teleport between Biblos and Hokebi and back. Finally, do the "Mod Maniac's Partner" quest, which will let you make Machine allies. Note: Machines can use any weapons but no armor. You can melt down any armor you have and add the stats the armor had to the Machine. The first armor type you use determines the Machine's color. For example, if you use a Bane +1 Chain Leg, it will turn the Machine purple. Machines have six body types and six engines types.
You can get allies for your party in the Targus Guild for the following costs: 500g for the first ally, 1,000g for the second, etc. In the guild, go to the woman with the cigar on the left and select the first option (Ally). You will see four options: "Add Ally", "Remove Ally", "Find New Ally", and "Dismiss". Choose the "Find New Ally" option to make a new member for your party. Then, select the "Add Ally" option to now have two party members.