In response to links5095
I, like you, have no idea what 'fame' does, and I believe that armour is worn for the enchant effect and the actual defence rating (+2) is used to decrease there hit chance. When it says 'D100(46) Vs 23' D100 is the type of dice your rolling (a hundred-sided dice) (46) is what you rolled and under 23 would be a hit. Armour would decrease the 23 for your enemy in the same way as dodge but dodge is a skill you cannot lose, but armour you can take off.
I can see your annoyance in the main quest line, mostly because I thought the same. In fact I still think so, so much so that I try to avoid them by doing all the side quests first. I also experienced my fair share of lag so I found out that by right clicking the game it gives you an option to change it.