Does anyone know if stacking effects, for example; The atronach stone: 50% magic absorb, could be combined with, Alteration: Magic resistance: Block 10% of a spells effects and; the magic resistance from enchantments on items. Do these stack? Is there a cap to the total amount of magic resistance you can have? And if so, is it also possible to go into a negative number and gain magicka from other peoples spells?

I'd also like to know this. And while we're on the subject do potion effects stack? If I drink two Philtres of Blacksmithing do they stack?

I don't believe they stack, I believe they are counted interdependently. I mean if you have 5 different "+10% chance to reflect magic" buffs then spells have to pass 5 spell checks before the game considers if it was reflected or not.

im pretty sure that the same potions wont stack, Effect do stack however with other potions wich adds some of the same effect or spells

edit= imagin chucking 10 Magica protection potions .... yeah OP?

Question 1) If it works the same as Oblivion, everything within a single effect stacks. For example, Potion of Resist Frost (15%) + Shield of Frost Resistance (20%) + Nord (25%) would indeed net you 60% Frost Resist. However, Spell Absorbtion and Spell Resistance are not the same effect. Furthermore, the magnitude of Spell Absortion is the chance that you will absorb all of the spell. So, if you have 50% Absorb Magic and 50% Resist Magic, first the game will roll to know if the spell goes through or is absorbed, and if it does go through, you will resist half the damage or effect duration.

Also, check this: http://www.uesp.net/wiki/Oblivion:Magical_Effects#Reflect_vs._Absorb_vs._Resist

Question 2) Potions, however, should not stack. Drinking two 20% philters won't net you 40% resist.

Well, I think I'll try and get my magic resistance to 100% first, through enchanted items only, and see if the absorb effect from The atronach stone still has any effect.

I can confirm that the absorb effect from The Atronach Stone and the magic resistance from enchanted items have 2 distinct different effects:

The magic resistance from items negates a certain percentage of damage from spells that hit you.

The absorb effect doesn't negate a percentage of damage but rather, has a chance to negate a spell completley and absorb it. For example, The Atronach Stone will give you a 50% chance to either negate a spell completley or if your chance fails, take full damage from that spell.

I would imagine that the magic resistance is applied after you fail to absorb a spell however, I still don't know for sure as I could only get 50% magic resistance at my current enchanting level using a ring and a necklace.