Physical resistance vs. Armor vs. Defence

This question is an interesting one. It is a little subjective, but a brief explanation of these statistics may serve us well.

Armor: This determines a flat amount of damage that will be subtracted from a physical hit. This is directly countered by an enemy's armor penetration (AP) stat. Rouge-like foes will have more of that. Example: You heavily armor your character and he has 50 points of armor. Burly brute hits you for 60 damage with 0 armor penetration. Damage taken is 60 - 50 = 10 points. Suppose sneaky rogue hits you instead for 35 damage with 30 armor penetration: 50 armor - 30 AP = 20 effective armor. 35 damage - 20 armor = 15 damage taken. AP can never add to damage beyond negating armor. Because most enemies have some AP, very small amounts of armor are effectively treated as 0 armor.

Defense: This determines how likely a foe is to hit you in the first place. This is opposed by an enemy's attack (accuracy.) Even amounts of attack and defense lead to a 54% chance of hit. Every point in favor of defense reduces that probability by 1% and vice versa. Note that many special attacks (not even mentioning magic) will ignore the defense stat. At a low enough level of defense, all attacks will hit, making tiny bonuses beyond that possibly worthless.

Physical Resistance: This determines the probability of avoiding nasty status ailments that are often side effects of physical attacks (or the primary purpose of them) such as being stunned or knocked down. Every point of this stat grants roughly an additional 1% chance of avoiding the effect. This is countered by enemy level, enemy type (champions are harder to resist for instance) and enemy attack attribute (often Strength.) At somewhat low levels of physical resistance, this will be reduced to a 0% chance of resisting a physical effect.

Note: Two common and nasty physical effects are knockdown and stun. The indomitable two-handed stance will completely prevent these from affecting you, so if your tank is a two-handed weapon wielding warrior and has the stamina to spare, physical resistance becomes even less helpful as it is redundant for these nasty and common ailments.

Fatigue: This one wasn't mentioned in the question but is very important. If an armor is very heavy, it will often increase fatigue, increasing the amount of stamina or mana required to use abilities. If a warrior is unable to use his taunting or damaging abilities, he will be unable to tank very much because his aggro control will be limited.

Analysis: Due to everyone having a small amount of armor penetration, small amounts of armor are useless. Due to exceptionally low defenses playing little/no role in chance to dodge, it also is worth less in small amounts. Due to the way resistance checks work, very small amounts of resistance are basically ignored. So, the general plan is to focus on statistics that you are already pretty good in, rather than spreading your stats around. If you get lots of armor, you will be effective at resisting damage and allowing your healers time to restore your health. Additionally, the heaviest armor grants a very small bonus to your aggro control.

If you already have very high defense, increasing that further can be a good idea instead of increasing the armor stat. This will leave you vulnerable to attacks that ignore the defense stat as well as becoming a problem for the times when you get unlucky and are hit by normal hits because the damage will be high and spiky, making it difficult to predict when you'll need healing.

Investing in physical resistance is a good secondary goal if you already have a high physical resistance to build off of. It is very difficult to accrue enough of this stat to make it a serious primary objective for your defensive strategy, and it will do nothing to help against basic attacks.

Keeping a low fatigue is crucial to pulling foes away from weaker party members. Thus, for warriors, the main considerations are:

1) Get enough Armor to survive some hits.

2) Get skills/equipment to allow for reasonable stamina management. If you can afford heavier armor and still use your taunt-like abilities, go for it. (This is much less of a consideration in the expansion where you have stamina potions.)

3) Physical Resistance is nice but don't really worry about it unless you have more than one piece of equipment offering an explicit bonus to it.

4) Worry about defense only if you have a shield and/or skills that really benefit it. It likely won't matter much if you are using a two-handed weapon as your defense stat will be mostly whatever you can get from your rather low dexterity stat.

5) Make sure to read your armor descriptions for "set" bonuses. Some armor will give a small (or large!) bonus if you complete the set. It can occasionally be worthwhile to use an inferior piece of gear in order to acquire the set bonus for matching your other gear.

For rogues:

1) Get lots of defense. Your dexterity will already be good, so improving this further will help more than a modest increase in armor that will often be overcome by penetration.

You really shouldn't be tanking with mages unless you are a particular specialization or are shapeshifted to a bear.

One interesting theme in this game is that specializing in one thing very singly tends to pay off more than diversifying.