The IR free-electron laser (IR FEL) at Jefferson Laboratory has achieved steady-state 3 micron lasing at a power level of 1.7 kW. Efforts to upgrade this device to 10 kW operation over the next three year are underway. As a result of this success and recent technology advances, free-electron lasers (FEL) should be considered a serious option for high-power, commercial material processing and military applications. The discriminating attributes of FELs are their wide-band tunability, their implicit potential for very high-power operation due to the vacuum lasing medium, and the intrinsic picosecond pulse structure that promises superior performance in certain material processing applications. Applications spanning high-value-added micromachining to low-value-added, high-power, high-throughput surface processing of metals and polymers are identified. The projected economics and market insertion point for a potential commercial application in polymer processing is described. Concepts for compact high-power FEL systems based upon superconducting RF accelerometers with energy recovery are defined. Key technology issues on the path to commercial deployment, such as the demonstration of reliable, high- current photo-cathode injectors, are identified and discussed. It is concluded that the first commercial material processing FEL beta units could be coming on line in about five years.