The psionic power inertial armor is the equivalent of mage armor, providing +4 AC for 1hr/level. As with all psionics you can boost it by using more power points. For every +2 power points it gives a +1 AC.
If your not familiar with augmentable powers, every 2 powerpoints you add to the cost is in effect making it a power of one level higher. you can only spend a maximum number of power points equal to you psion level. and all powers of a given level have a cost equal to the minimum character level needed to use that power (1st=1, 2nd=3, 3rd=5, 4th=7....)
So at 3rd level you can use it as a 2nd level power +5, at 5th you can use it as a 3rd level power +6... etc etc. this seems to be fairly consistant with Zad's comment from the complete arcane.
mage armor is very useful for the low level pc. but what if the bonus offered was +1AC/spellcaster level. it seems to me that this would be balanced