Under the official rules, armor makes you harder to 'hit'. The rule-generated outcomes don't distinguish between an attack that misses you altogether and an attack that hits you on the armor and fails to do damage. This makes it tricky for a GM (and even more for a player) to visualise and narrate combat action. It may make it hard for players to know when their best options are normal attacks, touch attacks, attacks denying dodge bonuses, or effects that don't require attack rolls at all. It also fails for allow for different kinds of attacks (such as heavy pounding versus quick, light slashes) to be differently effective against targets using different forms of defence (such as tanklike armour versus nimble dodging).
So I want to try out the variant by which armor doesn't make you harder to hit, but instead protects you from damage. And the number that represents how hard you are to hit is unaffected by armor (or shield, natural armor, enhancement bonus to any of these, etc.) It is basically touch AC.
But of course 'touch armor class' is the wrong name for something that has nothing to do with armor. Currently, I'm considering calling it Evasion. Since this stat would basically represent how good you are at dodging or otherwise ensuring that attacks and fast-moving dangers miss you, Evasion can also do the job of the Reflex save. The rules for Evasion are in the Combat Statistics section.
The way I am experimentally handling armor is to have it reduce a certain amount of damage per hit. The rules are in the Injury and Death section
So, what are the effects of this? I think it makes the character sheet easier to understand, having a stat that says how hard you are to hit, and another stat saying how well-protected you are from damage when you do get hit - rather than three different stats (AC, Touch AC, Reflex save) saying how hard you are to affect with different attacks. It enables the GM to narrate misses, hits absorbed by armour and damaging hits straight off the dice, rather than trying to judge different results using mental arithmetic. It will enable a realistic and interesting difference in how different attacks (eg accurate or powerful) perform against different defences (eg nimble or tank-like). It also opens up the possibility of handling touch attacks better, especially where a creature or character with weapon or natural weapon damage also has a spell or special ability that inflicts a touch effect.
Armor damage reduction will tend to make multiple low-damage attacks less dangerous, but single high-damage attacks relatively more dangerous.