Here's how combat works, as tight as I can make it right now.
Equipment
To get rid of secondary damage rolls (see Combat), we need to convert how weapons and armor work.
Weapons:
One-handed simple weapons deal 2 points of damage (+ Str modifier)
Then change based on the following:
Martial +2
Two-handed +2
Ranged -1
Small -1
Finessable -1
Reach -1
Exotic +2
Masterwork +1
Non-thrown weapons don’t give Strength bonuses unless they’re Mighty (Crossbows not at all)
Players should record how much damage they do on a successful hit (weapon plus Strength, in most cases) and then divide the value by 2 to get the Extra damage value (round down). Neither value (damage or Extra Damage) can be less than 1.
Option: Reduce the damage by 1 to get a +2 bonus to the Extra Damage value.
Shields:
Shields give +1 or +2 bonuses to Defense actions, depending on size.
Armor:
Armor reduces damage on successful attacks, equal to the AC bonus it would grant divided by 2 (rounded down).
Combat
Attacks are made with the weapon group skills, and resisted with the Defense group skills. If an attack equals or exceeds the opposing Defense, then it deals damage. Damage is calculated based on the chart above, and modified by Strength (except for certain ranged weapons, that get no modifier).
For each 4 points by which the Attack defeats the Defense, deal the Extra Damage.
If the Attack defeats the Defense by 10 or more, it also ignores damage reduction due to Armor.