Cure Potency refers to the effectiveness of healing spells, such as Cure and Curaga, and even spells like Healing Breeze wielded by a Blue Mage despite not bearing "Cure" in their names. Anything that increases Cure Potency directly affects the amount of HP healed by these spells.
Cure Potency ignores the "soft caps" of healing spells. Equipment that enhances Cure Potency is usually much more effective for healing purposes, as opposed to equipment that enhances Healing Skill or Mind which are greatly limited by soft caps.
Cure Potency only applies when Cure is used to heal a target. It has no effect on the damage done by Cure when used to attack Undead enemies.
The highest possible Cure Potency you can achieve is +42% with Dia Wand and Templar Mace via Dual Wield, Aristocrat's Coat, Medicine Ring. With the Healing Feather enchantment, you can have as high as +57%. Meaning if you use Cure V for 800 HP, you could get up to 1256 HP out of it for example.
Equipment that Enhances Cure Potency
Level Type Name Potency % 40 Club Dia Wand Cure Potency +10% 50 Ring Medicine Ring Latent Effect: Cure Potency +10% 51 Staff Light Staff Cure Potency +10% 51 Staff Apollo's Staff Cure Potency +10% 52 Leg Armor Puppetry Churidars Automaton: Cure Potency +5% 54 Earring Hospitaler Earring Cure Potency +5% 55 Staff Healing Staff Cure Potency +10% 55 Staff Dryad Staff Cure Potency +10% 61 Throwing Healing Feather Cure Potency +15% 62 Club Asklepios Cure Potency +5% 68 Body Armor Noble's Tunic Cure Potency +10% 68 Body Armor Aristocrat's Coat Cure Potency +12% 71 Club Templar Mace Cure Potency +10%