I wasn't clear enough in my post. I meant d20 systems that handle armor well. I like the way armor works in Savage Worlds and in Burning Wheel, but most of my experience is in 3.5, Pathfinder, and 4e.
Pretty much all of the D&D/d20 rules, regardless of game, stink when it comes to handling of armor if you are looking for anything more than a "this arbitrary number meets that arbitrary number" in that there is no "reason" for why the numbers are what they are other than trying to scale with the BAB/AC/hp arms race.
The only way I've seen is to whole-sale throw away those mechanics and go with something else.
As I indicated earlier, a system that uses a low number for an armor's "AC" value that is factored against a weapon's penetration to determine how much damage is reduced when hit seems to work well.
Of course, you have to throw away the idea that AC = 10 + armor + dex + shield + bonuses and that a successful hit = d20 + BAB + STR (or DEX) + bonuses > AC,
and that damage = random number + STR + bonuses leading to death is hp - damage until hitting zero (or some lower number).
I've thrown away the entire combat system as such and gone with the following (blatantly stealing pieces from the REFLEX system and the Spycraft 1.0 Shadowforce Archer system):
AC = armor + shield + dex + bonus.
DR = armor / 2
base hp = [10 + STR + (2xCON)]/4. Wound levels occur at multiples of the base hp.
successful to-hit = d20 rolled
lower than controlling attribute (STR or DEX) + skill ranks - opponent's AC
number of d20s rolled to-hit = multiples of 4 ranks in the combat skill(s) - 1-4 ranks = 1d20, 5-8 ranks = 2d20, etc. Margin of success adds (how much better than the target to-hit number) adds to damage, and multiple successes beyond the first add an additional 2 to the total margin of success.
No skill (i.e. non-proficient in the weapon) means you roll 2d20s and pick the highest roll.
Feats in the weapon automatically give you 4 skill ranks in the attack skill for the weapon group (I'm lazy and just use the Simple, Martial, and Exotic groups rather than the alternate weapon groups).
If you hit, damage = fixed damage value for the weapon + bonuses + the amount you roll lower than the needed to-hit roll. The weapon's penetration is the current critical multiplier.
Example below: A standard d20 Orc vs. a standard 1st-level Human Fighter wearing with a 16 STR, DEX 12, 15 CON, chainmail, with a lt. steel shield and a longsword.
The Orc has the following relevant stats:
AC = 3
DR = 2 (1.5 round up)
base hp = [10 + 17 + 22]/4 = 12. Damage track = 1, 12, 24, 36.
Weapon = falchion (base damage = 4, penetration = 2).
Human Fighter has the following stats:
AC = 7
DR = 4
base hp = 14, track = 1, 14, 28, 42
weapon = longsword (damage = 4, penetration = 2)
The Fighter wins initiative and attacks first. He has proficiency but no extra skill ranks, so he rolls 1d20L. He has to roll lower than a 17 (STR 16 + 4 skill ranks minus AC 3). If he does so - let's say he rolls a 14. He does damage of 4 + 3 (the amount he rolled lower than 17) + 3 (STR Bonus) for a total of 10 points. The sword has a penetration of 2 and the Orc's DR is 2, so it reduces the damage down to 6 points. The damage is greater than 1 but less than 12, so the orc suffers a slight wound, which means that the amount of d20s the orc rolls reduces by one level (i.e. instead of rolling 1d20L to hit, he has to roll 2d20H.
So now it is the orc's turn. He has to roll 2d20H and get lower than a 14 (STR 17 + 4 skill ranks minus AC 7). Not too bad even with the one level of wounds. Let' say he manages to roll a 9 and a 10. Well - his margin = 14 - 10 = 4, So - he hits and does 4 (+ 3 Str) points of damage, minus the 8 points due to the fighter's armor (DR value * weapon's pen value), resulting no damage to the fighter.
Next round, the fighter rolls his 1d20L and scores another hit, doing a total of 4 points of damage - since the orc already has one slight wound, a second slight wound bumps his wound category up one level to moderate (but additional wounds of the same level don't) - now the orc has to roll 3d20H instead of 2d20H and must roll a fortitude save (target = CON of 12 + the FORT Save bonus of +3 which is a total of 15) or go into shock. With 3d20H, he rolls an 18, 14, and 8 and has to pick the 18 = so he fails by 3 and goes into shock. Now, due to being in shock, he has to roll a Will save each subsequent round in order to act. The orc attacks and misses.
Next round, the fighter presses the attack and decides to use his power attack (up to the number of skill ranks) and so his target number is 16 - 3 = 13. He rolls 1d20L and gets a 7 - a critical! He does a total damage of (4 (weapon base) + 3 (STR) + 4 (power attack)) x 2 (crit) = 22 points of damage - minus the 4 points of DR = 18 points - a moderate wound. That is the 2nd moderate wound since the orc's wound level already bumped up to moderate last round - making this a serious wound. The orc now has to roll 4d20H on actions, and has to roll his FORT save. But wait - the previous shock results indicate that any action that puts a character into shock makes him unstable instead (i.e. he begins to bleed out). The orc rolls his FORT save (14, 3, 20, 2) - his 20 not only fails (making him go unstable instead of just going into shock) but the margin of failure is 5 or more.
The orc rolls his WILL save (target number = WIS of 7 + his -2 penalty) - he rolls 12, 12, 18, 6. Yep - he can do nothing this round and goes unconscious. The next round, the fighter stands there and watches him bleed. The orc lays there, while unconscious and unstable - since he is unstable, his wound level increases by one level each full round - so the orc is now critically wounded. The next round (while the fighter rifles through the orc's pockets to find the pie), the orc's wound level increases again and he dies.
As you can see - with this system, you don't have to worry about massive armor class bonuses (even an adult black dragon's AC becomes only a 17 (natural, size) - difficult, but not impossible when you consider that at those levels, a PC will likely have a STR of 25 and 10 or more skill ranks, so the to-hit number becomes 18) and the dragon has a DR of only 9 (Natural / 2). Likewise, that dragon's hit points (and track) are 1, 18, 36, 54 - also difficult but not impossible to defeat. Of course, the fact that that dragon, on a successful hit does a minimum of 12 points on a bite, 7 per claw, 6 per wing, and 10 per tail slap means it is still terrifying to deal with, not to mention the damage from the acid (I halve the average damage value for all area attacks).
