All of the information here is gleaned from watching hours of combat spam. it gives me something to do while I cue up specials Im posting this here as well as the armorsmith boards. I hear a lot of people wondering about armor, and most dont know how it works. I just figured it out recently as well.
Im going to break it down by stats found on all armor:
All armor has durability. Most of us have seen its effects. Armor in this game seems to decay in some relation to the damage it takes. The more damage, the faster it decays. As the armors get better, they increase in absorb, and also increasse in durability to make up for it. Use a repair kit to replenish durability, but be prepared to break it and have to buy a new piece.
All armor has a an AC of 1(as far as I can see, prove me wrong on this) It will absorb 50% of all damage not listed in vulnerabilities PLUS any percentage listed in Protection. Say if you have 10% kinetic(this is a value found on chitin). Damage dealt is 100, the armor will take 50 damage plus 5 more damage. It will say "Blah blah armor absorbs 55 damage" in the combat spam. The offshoot from this system is that small damages get lowered by less than large damages. Which is partly the reason I didnt notice before. For most hits, it will look like your armor absorbs 50%, but at higher damages the secondary number is in effect as well. At first I thought it was a rounding error
a. Special protection
all armors have a type of damage that they are best at absorbing(bone: energy, mabari: heat and blast). I believe this is also where layers will come into effect later(when they work).
b. Normal Protection
this is where the natural defense of the armor shows up. All of the damage types that the armor absorbs are listed here.
These damage types are what the armor will Not absorb. You will be hit for full damage with these types of attacks. Even if your AC is 1. Some very rare damage types will fall into vulnerabilities, that I can only see players doing. Have you seen an electricity attack from an npc? I havent.
a. Health This number is subtracted from the secondary stats. It will reduce Strength and Constitution by the given amount. Effected mostly by Chestplates.
b. Action Same as above, only for Quickness and stamina. Leggings and boots effect these areas the most
c. Mind Same as health only for focus and willpower. Helms effect this area greatly
Encumbrance will lower stats by a huge amount for good armor. Even experimented suits will have a large effect. I have a very rough suit of chitin right now, and my strength, constitution, quickness and willpower are dipping into the 100-200 range while my focus is like under 100. This will get better, but I would expect it to only halve, which is still significant(at least for a brawler)
Remember that both creatures and players have armor. The above rules still apply. If you have high enough creature knowledge, you can see all of the stats that matter on creatures. To help you decide what to attack and what not to, as well as pinpoint the vulnerabilities. I assume most people that hunt have no idea what the creatures armor is, and wonder why their lightning gun isnt hurting the creature, or their new blaster of armageddon is only tickling the giant sand beetle.
I hope this is helpful to some people. If it has been done befor I hope that i have added something to it. This is a good start. I will try to add an explanation of damage types when I figure out more of them.
Please feel free to dispute my claims, or prove them right.