>>So does this take the wood and tools past masterfully crafted or just get ya there easier with crappier material

Master-crafted is the cap so it will take it up to there. IIRC Theory will give tools a 15-20 point bump in quality which is enough to take a superior quality tool up to master-crafted.

I'm not sure on how much Specialization will raise material quality. I'm pretty sure it is a fixed amount like Theory and won't turn poor quality materials into 99 (master-crafted) quality. Someone with more experience with these techs might be able to give a more exact number though.