Alright like many people around here I have fired up oblivion again with the announcement of Skyrim. I was always a mage before and never used Heavy Armor. Can some one put the phrase 'A Master's equipped heavy armor does not encumber them at all." in I was always a mage and I laughed at heavy armor and left it on the floor terms. Also is there a set that I should look for or just use level quality armor. Thanks in advance

Doesn't encumber you at all means that any heavy armor you wear doesn't add to your overall encumbrance. If you unequip that armor though it will be added to your inventory and then be added to your encumbrance. So as long as you wear it you're fine.

As for what kind of armor to wear, anything is fine, You level up just from taking hits anyway.

And although at Master level in Heavy Armor, it does not encumber you when wearing it, it still reduces your spell effectiveness by a small amount. In most cases that reduction is not significant. But it makes a big difference for spells with a level associated with them (eg Command, Frenzy, Dismiss) in which case they will not work about level 23 or 24. If you have no armor and a level 25 spell it will work on any target, even if above level 25 - but iwht any armor it is capped, even if you master the Armor skill.