Also found this at Wowwiki.com -- just copying it just in case -- good stuff like this was at the actual wikipedia site until these entries were vandalized. If you go to wowwiki you'll see that there is a diminishing return (they post a graph) that appears to start sloping down at around 8000 armor and the max armor damage reduction possible is 75%:

Armor reduces physical damage done against you by a certain percent. It depends on the level of the monster (or player) hitting you. Your own level doesn't matter. By hovering your mouse over Armor on your Character screen, you can see the value of this reduction for monsters that are at your current level.

This percent reduction will actually fall as soon as you gain a level if you're still wearing the same armor. You haven't lost anything, it's merely showing you that your armor isn't as effective against monsters one level higher than you used to be.

Armor = 2 * Agility + objects armor + shield armor.

%Reduction = (Armor / (Armor + 400 + 85 * Enemy_Level)) * 100

This is simplified to %Reduction = (Armor/(Armor + 5500)) at level 60 for the standard tooltip reduction vs. 60.

The maximum damage reduction is capped at 75% of the damage.

To calculate the amount of armor needed for maximum mitigation one can use the following formula:

Armor = 1200 + 255 * Enemy_Level

Thus a lvl 60 character who wants to acheive 75% reduction vs. lvl 63 mobs would need 17265 AC.

Or a more general formula. The amount of armor needed for a specific reduction is:

Armor = %Reduction * (400 + 85 * Enemy_Level) / (100 - %Reduction)

It seems that there is a distinction between "natural armor" (white item description) and "magical armor" (green item description, e.g. provided by Armor Kits). Talents which give a percentage bonus to armor (like druide bear form) only apply to the natural armor rating. This is especially important for druids since bonuses received from armor kits, sets and green effects in general are not affected by bear form and Thick Hide.