Now that physical damage has been divided into Slashing, Piercing, & Blunt, we can finally address the question of why a steel breastplate is any different than a suit of leather armor.

Each armor offers the same overall defense factor [or *possibly* more or less, depending on the DM's discretion], but they offer different resistances.

For this purpose, armors are divided into Very Light, Light, Medium, and Heavy.

Armors offer a base resistance factor and a damage threshold-first the base resistance is subtracted, then the damage threshold. [It's rather possible for splint mail to block an arrow entirely.]

Very Light Armor covers anything lighter than leather armor, including the character's arms, legs, and fists for blocking purposes. The lightest sort, thin clothing, offers +10% resistance to bashing.
The heaviest sort, a thick fur jacket, offers +20% resistance to bashing.

Light Armor is leather-based, up to and including studded armor. The lightest form- leather-reinforced clothing- offers +15% resistance to slashing. The heaviest sort, heavy steel-studded armor, offers +30% resistance to slashing, +5% resistance to piercing.

Medium Armor is all manner of primarily metal-based armor that does not contain plates. The lightest form- ring mail- offers +20% resistance to piercing and +5% resistance to slashing. The heaviest sort, splint mail, offers a whopping +50% resistance to piercing, but gives -10% to bashing.

And Heavy Armor is plate mail and beyond. The lightest sort of plate armor, a light breastplate, offers +40% resistance to piercing, +20% resistance to slashing, and -10% resistance to bashing. The heaviest sort, full-body, visored-helm steel plate, is +80% against piercing, +60% against slashing, and -30% against bashing. In addition, armor this heavy tends to reduce elemental resistance, especially electric.

Magical shields are a horse of a different color. They have HP which they do not regenerate on their own, and add to overall damage resistance.

I'll just note that these resistances are applied separately from normal resistance levels - for example, 50% armour resistance plus 50% natural resistance makes 75% total resistance to a damage type, not 100%.

Thirdly, if resistances of heavier armours aren't going to average out at zero, we'll need an encumbrance system to balance it out. The simplest way would be a straight penalty to Agility, so characters in heavy armor hit less often, get hit more often, and move more slowly. It would be entirely possible for a character in heavy armour to have a negative effective agility rating, resulting in penalties to hit and to initiative.

Furthermore, magical ability is limited in heavy armor:

Weapon-based special abilities may be used in any armor, if their only damage type is the damage type of the weapon used to inflict the damage. Unarmed combat is a special case; characters cannot make good use of any unarmed combat training, not even regular attacks, unless they are unencumbered (very light armour, or none at all).

Priestly powers can be used in any armour, but are limited to healing, non-damaging status effects and Holy attack magic. (Yes, I know not all priest spells fit into these categories, but it's necessary for game balance that we assume other priestly magic requires more movement.)

Psionic power can also be used in any armor, but is limited to non-damaging status effects, Physical and Psionic attack magic. Because of constraints imposed by religious orders, it is not possible for one character to have both priestly and psionic powers - one category will have to be considered normal magic and therefore subject to the restrictions of normal magic use.

Normal magic may be any sort of special ability other than one based on a physical attack. Normal magic may be cast in any armour, but has a failure rate of 1% for every point of Agility removed by the armour (full plate armour could remove 30 points or more of Agility, giving a 30%+ failure rate for magic). This is quite enough to discourage mages from going around in heavy armour, and it *finally* gives warriors a decent reason to use physical attacks rather than magic. Woohoo!