In short, the suggestion involves combining light and heavy armor into one skill, and changing the way skill affects armor use. Armor suits will still be classed as light or heavy, but will be goverened buy the same skill. The difference between the classes will be determined by the perks and penalties of the armor itself. It never made sense to me that a character can be a Master of Heavy armor, but still completely useless at wearing light armor.
So here it is:
1) Light and Heavy Armor skills are replaced by a single Armor-skill
2) Armor protection is NOT determined by your armor-skill, but by the properties of the armor itself. In general, Heavy armor gives a very high level of protection, light gives a low to moderate amount of protection. Skill does not affect this. (Minor bonuses might still apply)
3) New penalties are introduced once armor is worn. (See point 4 for how the new skill will deal with these penalties) The point is a more realistic depiction as to how armor will limit a character. Armor will ALWAYS give good protection, but the penalties involved might reduce your combat performance drastically unless you are skilled enough to wear armor:
3.1 ) Penalty: Speed attribute. As long as you are wearing armor, your speed will be reduced. The penalty will vary from armor to armor, but in general Heavy armors will have severe penalties, and Light armors will have small/moderate penalties.
3.2) Penalty: Agility attribute: Same as Speed-penalty. Severe penalties for heavy, less severe for light. Also includes fatigue-penalty; fatigue is depleted at a much higher rate while wearing armor.
3.3) Penalty: Stealth-skill is reduced while wearing armor. This penalty should be VERY severe for heavy armors, and small/insignificant for the very lightest armors.
4) How the skill will work.
4.1) Relation to penalties. The idea is that the skills primary function is to reduce the penalties noted above. As the player armor skill increases, the penalties are progressively reduced. (But never eliminated entirely). As the players skill increases, he is able to wear heavier armors, but it will ALWAYS be a tradeoff between speed/agility and armor protection - as it would be in real life. Note: The stealth-penalty will only be reduced by a small amount, contrary to the other 2. Heavy armor will always mean serious limitations for stealth-characters, even at very high skill levels.
5) Examples:
5.1 You start out with a level 1 character, combat-oriented with a low-level armor skill. (Below 10). At this skill level, the penalties you would suffer from wearing steel armor are so severe that it reduces you to a well-armored turtle. This naturally affects both your ability to walk/run, your ability to use your weapon, and your fatigue level. As a result, your combat performance would suffer greatly from wearing this armor, despite the added protection.
However, you are able to wear leather armor, because the penalties are much less severe. As your armor skill increases, the penalties involved are reduced, and you are able to wear progressively heavier armor. After a while, your skill is high enough as to allow you to use steel armor without combat performance suffering noticably.
5.2 You start out with a level 1 character, combat-oriented with a moderate armor skill. (15-20). At this skill level, you are able to wear iron/steel armor without suffering too severe penalties, and your combat performance is still acceptable. As your skill increases, you are able to wear heavier suits, such as orcish/dwemer etc.
5.3 You start out with a level 1 character, stealth-oriented with a low armor skill. You wear leather armor to get some protection, while avoiding the severe penalties of heavier armors. As time progresses, your armor skill increases, and you are able to wear heavier armor suits. However, since the stealth-hit isn't reduced significantly, you still stick with light armors to avoid the stealth penalty, trading protection for stealth.
6) End notes: This system means that armor choice will ALWAYS be a tradeoff between speed/agility/stealth on the one hand, and protection at the other. A consequence of this is that heavy armor will be the "high-end" armor compared to light armor; it will never be possible to achieve the same level of protection using light armor. However, it will never be possible to entirely eliminate the penalties involved with wearing heavy armor either, and this is the balancing bit. With regards to light armor, the penalties involved will continue to be reduced all the way up to skill level 100, so increasing the armor skill will still be important for light armor-characters. To give this more appeal to stealth-characters, the (smaller) stealth penalty for light armor might be reduced at a higher rate once you reach higher levels (75+), and be eliminated by 100.