@Zaffy
"If you include this function, wouldn't it be unfair that you can choose the top vets to put in your team, while the other team could have been filled with random nooby teammates?"
Sorry, I didn't elaborate more on the fixed teams aspect. The players are free to choose which team they get put on. Of course, this will bring about the problem of people wanting to be on the team with known strong players, and I can't just say that the lobby leader has the authority to ask people to go to a certain team or risk getting kicked, because THEN it brings the problem of having douchey people as the lobby leader. With almost all features comes exploits/problems, so it's a matter of compromising. I personally see it that if the player does not agree with the lobby leader's decision to arrange the teams, he/she can just leave and either start his own lobby, or join random team. However, the purpose of having this invite-only option is so that people can invite their own friends and guildmates into the match, and, at the risk of placing too much faith in peoples' moral values, friends/guildmates should, theoratically, treat each other fairly.

"Renders RvR (random team vs random team) useless by many"
I already mentioned that the matchmaking is strictly invite-only, so it's not open to public viewing at all. Forumchat and dragneel also mentiones that random team is still a viable option if your friends are not in a lobby or are already in a full invite-only match or simply do not want to invite you because they know you will barrel roll through all of them (or because you stole their favorite SK plushie when they weren't looking), or if you do not have enough friends/guildmates available to arrange a match.

"There are stuff that are exploitable, for example having many peoples' alternates playing as well. Get a good few friends, 4 maximum is enough, and they get 4 more alternates. 4 Friends fight against 4 alternates. Some prizes they could receive include bombhead masks and mini mist tanks. Exploit explained clearly."
What's there to say that this has not already happened with GvG? I admit, incorporating this invite-only matchmaking will make it easier for people to exploit krogmo rewards since you now only need 4 players and their alts to get a match going, compared to GvG's 6player requirement. In my personal opinion, entry fees and KC awards should still remain, to at least give people some incentive for playing. To minimise exploitation of krogmo rewards, remove the option to bribe and rank point awards (people actually care about them?!), and maybe increase the entrance fee to 300 or 400cr as well? (and subsequently reducing profit earned by winners from 80cr to 30cr, ie. assuming entry fee is 300cr, winners get 330cr instead of 380cr, going by the current system that we see now) As I mentioned before, there will always be people trying to exploit each and every new feature that comes. It is possible to minimise exploits, but it is almost impossible to prevent it entirely, since there will always be loopholes in the system. However, we should not be too focused on exploits and end up compromising the enjoyment of the majority.

@dragneel
Regarding options to toggle UVs, ATs and revives, let's save that for when we actually get this feature shall we? Since you and Zaffy already mentioned that these ideas have already been brought up before, albeit with some controversy surrounding them (eg, "I paid so much for my max shock UVs, why should I be denied usage of them in LD?!?!?!"), we should focus on fine-tuning the actual matchmaking options first, IMO. After all, those options will be for naught if we can't even get OOO to implement a proper invite-only matchmaking feature!

About that bit at the end where you suggested how the inviting would work, I find it a wee bit too tedious, IMO. I think the player who intends on starting an invite-only match should not have to go through a loading screen just to be able to start inviting. Don't forget, there are still players whose computers aren't...optimal, for running SK, so if we can prevent unneccesary loading, all the better~

PS: Yay, I finally realised that the "strong" HTML tag is for bolding... =_="""

Well, not exactly a 'customized lobby' per se, just a plain 'invite-only lobby' without the options to toggle UVs/AT/revives (yet).

Well, the greater rewards in RvR would be the incentive for players to opt to play there more. This invite-only option is more for players to arrange matches with friends and guildmates and have fun instead of constantly being profit-driven to spam RvR. You win some, you lose some - play with total random people to get greater rewards without knowing who you'll team up with and fight against, or play in an arranged match with friends/guildmates for fun but with lesser rewards.
While it's true that players can attempt to assemble their best team to win, other LD players aren't stupid either. If they hop into a lobby and see that one team consists of zomgsuperpro players while their team is just average, they are bound to object to the teamup. The best assembled team can only be the best if they can, well, actually get a match going without people objecting to the teamup, so a compromise has to be reached.

I agree that I'm placing too much emphasis on the lobby leader, but unfortunately, I cannot think of a way where everyone gets what they want without someone there to control the match settings/teamups, unless it remains as completely randomised, in which case I find that somewhat restricting since some players may want to be on the same team as a certain friend (Eg, a friend of one of the players but he does not know anyone else in that match, so he would probably want to be on the same team as the only person he knows, which will be hard if it's constantly being randomised). I'm not sure about what everyone else is thinking, but I personally like to at least have the option to have an arranged match with my own friends/guildmates without having to go through the tedious process of guild-hopping.

Instead of making a one-word post and showing us how much of a hypocrite you are, you could have, I don't know, actually mentioned the reason why you disagreed with this idea?

Assuming that you mean your reasons are exactly the same as Zaffy's, then my counter-argument to that is stated above as well.

Could you elaborate more on whichever aspect is giving you that feeling? Could it be the rewards system, or perhaps the process of making fixed teams? Right now, the only flaw(s) I can think of are the ones that Zaffy mentioned. I could suggest to eliminate entry fees and rewards entirely, but I'm afraid that that might put off people from playing in invite-only matches.