Correct. You just drop the new gem on top of the old. The old gem will be destroyed but... who cares?

You don't?!

/smackforehead

Assuming you're not being sarcastic (though, knowing you...), you lose the set bonus if they don't match the color pattern.

In my experience, the set bonus is not usually enough to justify sticking with the colors.

As a tank, it's MUCH more useful (assuming I've hit the 490 defense mark) for me to drop a +9stam or +12stam blue gem into a slot than worry about losing a +4 parry rating or +3 defense rating bonus.

Of course, the best thing to do is to watch out for gear with your "type" of socket. I shy away from Red and Yellow, but love me some Blue.

Don't forget that there are combination gems as well. A purple can fit a blue or red, an orange is yellow or red, and green is blue or yellow. These all give two types of lesser bonuses (like Potent orange gems give +spell crit and +spell damage, and can fit a yellow or red). It makes it a bit easier to mix-and-match gems, while adding more types of bonuses, and you still get the set bonus.

Since you say stamina is more useful than defense for yellow slots, you could use a jagged green gem on the yellow slot for +crit and +stam, so you're still getting stamina, but you're getting another bonus as well.

I'm a baby tank (66) by comparison, but I agree with Warlock - my tank-specific armor is slotted with nothing but +STA. Usually the set bonuses are blah anyway. Combination gems...you can get something like +4 STA and +4 STR on a purple, or +9 STA on a blue (these are for uncommon gems). As a tank you probably don't care about STR unless you're having problems holding threat, and if you are then +4 STR probably isn't going to make a difference.

That said, I love the whole gem thing, and have said several times in guild chat that I think it's a brilliant design decision. On non-tanking gear I have a fantastic time figuring out how I'm going to set things up, and I usually try to capture the set bonuses there.

Since Pallies share alot of gear with Warriors, alot of the time (like on the Felsteel set) the socket bonus is a useless amount of strength. And, yes, strength for Prot pallies is COMPLETELY useless. Therefore, there are only a few types of gems you should be using, if you wish to keep the bonus (again, note, for the prot pallies posting above):

Glowing Nightseye (Red/Blue): +5 Spell Damage, +6stamina
Enduring Talasite (Yellow/Blue): +4 Defense rating, +6stamina
Think Dawnstone (Yellow): +8 Defense rating
Runed Living Ruby (Red): +9 Spell Damage
Solid Star of Elune: +12 Stamina

For Prot Pallies, there really is nothing else, until Blizz gives us an upgrade, or finally makes +Block Rating/+Block Value gems

Mayfield actually mentioned something more important about the meta gems. Each one with state a requirement of Blue, Red or Yellow gems. This is what MUST be equiped on you on any of your current gear to get the bonus from the Meta gem. For instance, if it requires 3 Blue gems, I must have 3 blue gems total on all my other gear to get the benefit of that gem...Just an FYI.

Guess in following the question (and I didn't know you could replace gems with newer gems either...btw)

But, should I wait on the gems...I know that I'm Kara keyed and about the only lock, that phat loot will roll my way - so I have yet to socket a gem. Am I making the right call, waiting till I actually get some blue/purple lock gear - then socket with high gems?

no I'm a firm believer in always maxing our your current gear.. that way it makes getting the new gear that much easier.. at the very least pop in some green gems.. something is better than nothing.. and you can get green gems for dirt cheap.

What GG said. If your wearing anything that has a socket and the socket is empty, you are gimping your character. Nothing wrong with using green gems.