Battle Story would be a Bardic skill that you use after each battle to help you collect data about your previous battles without having to do it yourself, IF YOU WANT TO USE IT, that is ....
What it does:
The game records the last 10 battles you fought (not just visually
ARMOURER DIALOGUE OPTION: "Relate Your Most Current Battle Stories"
"I was just outside of town here, when I was attacked by a Goblin Lord with a large scimitar....." and then after a few moments of elasped time demonstrated by a fade to show time elapsing, the NPC says:
"Uh-huh, ah, I see. Yes. Ahh, okay, well, let me help you then. You ... seem to be vulnerable to lunging attacks along your sides because you only use leather there. Most of the attacks you mentioned in the last battle ... seem to indicate ... that you should switch to wearing Chainmail, because the most frequent kind of attack you are experiencing appears to be lunging attacks... why don't you look in my shop and find a good set of chainmail to trade in for your leather armour?"
The game could then anolyze your recent battles for a pattern of weakness, and the suggest the best kind of armour to wear for that weakness. Then the Armourer could take on the aspect of being a sort of "Guide" to your health, and thus be able to sell his Armour more like he would really try to sell it, by being a survival coach (think Insurance Salesman)...
BEYOND THIS USE, there are others which are potentially even more interesting and useful:
2. Personality ... Recount Your Battle Stories ... this for an increase in Fame or Infamy, depending on the style of life you are leading in your game ... resulting in some form of benefit either way. Are you the best fighter in Tamrial ... or the sneakiest thief in the world? Among thieves, your wretched exploits might seem like the coolest thing, raising your infamy and dark aires.
3. Bardic ... Tell a Story to a crowd of children or onlookers to earn travelling money on the road. Perhaps you can only do this once per town per in-game month. And the amount isn't very much, but it would be enough for a hotel, some food, and some basics.
4. Romantic ... Tell Your Adventures... this, to TRY and seduce a lovely gal (or if you're a girl, a handsome stud) ....
5. Fortify Town Morale .... Tell of Your Dragon Kills .... this, to help a town living in fear (and thus not going out to work or buy anything, causing the town to begin a slow death) to begin to feel that its possible to survive despite dragons, and that others are doing something about them to bring hope .... You can arrive in some towns to find the people missing ... not at work, the shops all closed. Posters are up showing frightful images of dragons terrorizing Skyrim. If you go into the homes, they are all filled with people who don't take kindly to your barging in and can force you out with a new ability of residents to "kick you out" ... But if you can first convince them to let you tell them your "story" perhaps their fear will lessen, and abate, and they may begin to take small steps toward rebuilding the community. You would, later down the line, become the hero of their town for helping to get the ball rolling again.
6. Quest Centric ... "Go and kill 10 completely different monsters from around the world in order to have the most interesting Battle Story to share in the world, in order to win a "Bard's Tale" Contest for a key that will unlock a secret chamber in a Dragon Wall atop a high mountain pass ...."
--------------------------------------------------------
EDIT: (I thought of some other ideas and so far no one's posted anything here, so I'll just add them to the original post...)
7. Other Adventurers ... the game could have other adventurers come at the same time as you to audition for the right to undertake certain missions. These could be high-profile adventures where you could gain some notoriety for solving them. They wouldn't be connected to the Main Plot, obviously, since if these quests were stolen from you, you couldn't complete the game. But here's how it works: the game records 1-2 "Battle Story" photos of you in combat with the more powerful monsters in the game (for your level) ... When something cool is about to happen (the CPU can be sort of watching for this), it automatically snaps 2-3 photos of your battle sequence when it's the most cool, from a 3rd person camera regardless of what view mode you are in. After the battle the system asks you choose which "memory" you want to keep from the battle, you can only keep one. This helps you "see" the important image of that battle so you'll always remember it yourself. And during the interview for whether you are to be accepted for this job, each NPC's "Battle Story" is displayed on-screen for you to judge, and then yours is displayed also. The imagenumber is recorded inside your savegame and the image is saved by that number. The imagenumber references what monster you fought, and how quickly you dispatched it. Those are used to form a hueristic algorythm as to the Impression you are leaving on the one doing the hiring. He then picks between the randomly-generated NPC and you. If your last 10 battles weren't all that interesting, then you can fail the interview and the job will go to your rival. Can't you just see it now?
"Hahaha, *I* killed a Giant Semi-Luminous Deviled Adder Demon from the Pits of Demolvogus .... but YOU only killed the 4-Headed Monkey to the South ... ! You svck!" So ... you have to go back and try to kill a few more advanced and interesting creatures.....
That could lead to some interesting outcomes. Where you could A) try to hunt your rival down and kill him to take the job away from him. If you kill him, the assignment meant for him automatically goes into your Quest Journal. OR ... B) He gets away and becomes a thorn in your side, returning the next time to try and outbid you again. The system does not allow for you to kill him in the presence of the man giving the job, and you are usually held for a time while the man is given a chance to leave town. So yes, you would have to actually track him using a tracking ability or skill of some kind.
I think this would a phenomenal way to show us, the player, is not always the center of attention, that there are other adventurers in the world, and if we want to be able to take the good jobs that come along, we will have to try to keep our Battle Story rating as high as possible. No killing rats! Now, that spell that makes enemies friendly toward you would be very very useful... you cast that spell on hell-bent vermin (dogs, rats, etc) and they stop attacking you and wander off in a daze.
Battle Story ... a system too detailed to possibly ever make it into Skyrim .... but hey ... there are always Modders. Go for it !