This thread is somewhat old and necro'd, but I'll still post this here.
From what I understand:
Defense mitigates ALL forms of damage (Player, Ranged, Spell, Physical, Melee, Everything) much like resilience in WoW PvP(sorry).
Dodge looks like it's only going to affect physical melee strikes (correct me if I'm wrong because I hope this isn't the case for the monk's sake)
Armor mitigates physical Damage via percentage reduction
Resistance mitigates spell damage
To my understanding, yes, this is how it works. Unsure about whether or not you can dodge physical projectiles.
As far as the calculations, it appears as though they are done sequentially and are multiplicative. I speculate that damage is first checked if it is Dodged/Blocked
; then, if not avoided, reduced by Defense
; then the remainder is reduced by your Armor/Resistance
; then the last of that is affected by - damage taken/absorption abilities
. I will quote an old post of mine with some beta testing figures.
Let me preface this by saying that as with many measurements, using small numbers is generally not good due to rounding errors, but it's all I have at the moment.
I let a Skeleton beat on my level 10 Wizard for about 50 hits (small sample, yes, standing around is unexciting) and recorded the damage I took with a variety of gear. Defense, resistance, and armor all say "Reduces Z-type damage from level [your level] enemies by X-percent", so I assume that an enemy below your level suffers more severe damage penalties than those at or above your level. Skeletons are definitely below level 10, so these numbers will seem somewhat off at face value.
Gear set - Damage mitigation - Average damage (% reduction)
Set A [naked/base]- 22 def, 0 armor, 0% reduction - 8.86
Set B - 37 def, 0 armor, 26.83% reduction to 10's - 5.21 (41.24%)
Set C - 22 def, 55 armor, 9.91% reduction to 10's - 7.43 (16.13%)
Set D - 37 def, 55 armor, both 26.83% and 9.91% reduction to 10's - 4.53 (48.84%)
I have no other measurable damage absorption or damage reduction. But based on this, I think it's pretty safe to say that damage is first reduced by Defense by its appropriate percentage, then the remaining damage is reduced by Armor or Resistance by its appropriate percentage. I would speculate that other abilities or items that "reduce damage taken" would follow these two mitigations, leaving you with whatever is leftover as actual damage taken, which could then be absorbed by Diamond Skin and so on. I believe this is a similar mechanic to most other games I have played and is fairly intuitive.