Cracked edges on freshly cut fondant.

I love my little wheel cutter. When I make ribbons, I turn them over & run my fingers along the side to smooth them.

Do you mean the raw ragged edge or cracking? If cracking, the fondant may be too dry. When working with gumpaste, I sometimes put a bit of shortening on my fingers to help smooth.

Sounds like your fondant is too dry.  It shouldn't be cracking.  What brand do you use or do you make your own?  Some need extra kneading & some need some shortening.

Hopefully someone more expierenced with this type I fondant can help. I've never made my own so I don't have any good tips.

Oh yes.  Put the mini marshmallows in a large plastic container along with a splash of water - probably 3 tablespoons.  Melt the marshmallows - stir to get out all the lumpy unmelted bits - then put a couple cups of powdered sugar in the bowl and the rest on your impecably clean kitchen counter.  pour the warm mallow mix into the center of the powdered sugar on your counter and start kneading with liberally greased (Crisco'd) hands.  Add clear vanilla if you wish.  Knead until you incorporate most of the powdered sugar - but it might not need all of it.  Roll it out once then twice (this gets rid of all the air bubbles).  I find that adding a cup full of melted wedding white Merkins chocolate to the mix when it's still in the bowl, helps improve the texture.  Hope this helps.

I never leave my fondant over night. It seems to alway crack or have elephant skin like texture. I just make it right before I put it on my cakes and let it cool before I actually cover them.. Works better for me.. (and I only use MMF)

SugarRushStuff,  compared to the recipe I use, your homemade fondant doesn't have any liquid glucose/corn syrup in it.  I always thought that that was there to help make it stretchier, so it might be worth a try?  Anyone else know better?
 

When you make the MMF make sure to knead it as much as possible.  I like to separate my MMF into 2-4 pieces, and lightly coat the pieces with a little bit of shortening, wrapped in plastic wrap. I let the MMF rest overnight.

 

When I am ready to used the MMF to cover a cake I knead the fondant and apply a little bit more shortening to make it pliable. I also grease my work surface with a little bit of shortening. I'm not crazy on using cornstarch or powder-sugar to dust my surface. If you used to much it will dry the MMF.

 

You can also try adding a 2 tsp of corn-syrup to your MMF recipe. It helps to make the MMF more pliable.