Why give you an armor rating of 1800 then if it only goes to 567? So really I only need to smith to 567 then and I should be fine!? What about weapon damage? Does that have a cap?Or is my sword that does 500 actually doing 500 damage.

No, there is no cap on weapon damage, afaik.

cool, thanks for the info.!

There is one more little quirk with the armor cap you may want to know. There is a "hidden" 100 AR you get just from wearing four pieces of armor (any armor) that does not appear in your AR rating. So the actual cap is 667-100=567. The reason this is inportant is that if you decide not to wear a helmet for aesthetic purposes (or of you decide not to wear gauntlets or armor boots) than the displayed AR will need to be higher than 567 for you to be at the cap. You can easily hit the cap with only a couple pieces of armor, but your displayed rating may need to be slightly higher, (something like 592) if you decide not to wear a helmet and higher yet if you decide not to wear other individual pieces or armor.

EDIT: I have heard that the reason that you can get an armor value so much higher than the cap is that they were planning on having enemies whose attacks ignored a percentage of your armor. If such enemies were in play, then having an AR well above the cap would be useful.