It stacks. Let's put out the end all of examples, to help the noobs so there are no more questions.
We'll consider someone with a few pieces of equipment:
<worn on finger> Ring of Leetness (+3 MP)
<worn on body> Breastplate of Uberbadness (+5MP)
<worn on head> Helmet of Ass-kicking (+3MP)
<worn on hands> Gauntlets of POWAH (+4MP)
<worn on waist> Belt of Stuff (+0MP)
<worn about body> A big bag (+2MP)
Okay. Since finger and 'about body' things don't count for armor at all, the only thing the MP is good for on those two pieces is for dropping spell damage. So, you have +2 and +3 from those two pieces. You have +12 from the other three pieces of armor with MP on them. Your total MP value here for SPELL DAMAGE REDUCTION is 17.
Now, if you are looking at melee damage, you calculate the damage reduction differently. Blows to the chest would have a reduction of the AC of the breastplate + 5 from the MP score. In the case of the helm, you use the base ac of the helmet + 3. That's all! The other scores from the other items don't matter at all. Only the item where the damage is being dealt.
I hope that helps atleast give people an idea of how important it is for a warrior to have greater MP on all their armor pieces.