Combination Skills are new magics that you could only use when you had certain Personas in your "team". For example, if you had Orpheus and Apsaras, you gained Cadenza, which healed 50% of your party's HP and upped their dodge rate. In P3P, these abilities are merely normal items like Medicine and you don't need to have any of the formerly required Persona to use them. Armaggeddon and Victory Cry is a ridiculously broken combo, because the former is a Combination Skill that inflicts 9.999 HP to every enemy taking all of your SP, but alas, Victory Cry is a passive ability that completely heals you after every fight. Getting the Armaggeddon item is quite a grind now (one requires 99 malachite? and 10 diamonds?), so it's not possible to do that, or at least not easily.
EDIT: Level 3 is when they start to be helpful, but you can use them from the beginning (it's just useless because the extra points once the level-up is reached are not taken into account). Using a matching Persona gives 50% more points. Also, yes, you can make combination items in the Antique Store.