One topic that’s sure to confuse new (and old) players in Diablo III is that of defense. In the game, Defense is now one of the four attributes, along with Attack, Precision, and Vitality. Defense is not the term for the number on all pieces of armor (as it was in Diablo 2). That number is now called Armor, and the total from all of your gear (modified by stats and skills and such) appears in your Character window in a big shield.
The biggest difference in this system, besides the slightly confusing name changes, is that Armor works like resistance; it does nothing to lower the to/hit of your attackers, and instead reduces the damage you take from incoming attacks. All attacks, if the tooltip is to be believed. Not just physical damage ones.
Armor isn’t the only factor that determines your, “All damage reduced by” number, though. Adding points to your Defense stat also increases your damage reduction, and a common question I’ve seen asked of beta testers relates to this. Which is more useful, Armor or Defense? And by how much?
I can’t answer that in great detail, but I found a pair of items the other day that made for a useful comparison. Check the annotated screenshot for the details, but here’s the money quote:
I was surprised at the difference, personally. I knew Defense would be more useful; after all you can get hundreds of Armor from an individual item, while Defense is gained much more slowly. But I didn’t think just 1 point more Defense with 1 less Armor would be worth more than 4% additional damage reduction.
Admittedly, this is on a very lightly-equipped, low level Barbarian, where every point of stats makes a big difference. But this gives you an idea how valuable it is to add to your stats in Diablo III. See the Defense and Armor (and Combat, and Resistance) pages in the Diablo Wiki for much more info on these issues.