Okay, I do not know if this is true, so please correct me.
Armor has two values. A deflect value and an absorb Value.
When someone hits you and cannot pierce your armor they miss you or it is deflected. This is based on the piece of armor and the material and cannot be changed by enchants.
When someone gets past your armor's ability to deflect the blow, damage is dealt. The damage is a combination of weapon + enchants + strength. This then goes against the amount you can absorb which is based off of armor's base absorb + enchants + sanc + spirit aura + armor spell. If all that crap is more than the damage dealt it is treated as it is deflected. If not, then it deals it's damage to the end user.
Please uberSKers out there, correct me if I am wrong or commend me for further confusing the populace.