"Companions will equip better weapons and armor if given to them."

What does this mean? Is it the members of the Guild 'The Companions'??

Or does it refer to all followers?? I have no problem as is of whether or not if followers equip the best weapons and armor by the ratings of them. Infact it is a problem since they only do equip the best stuff and not what I would like them to have.

Does this patch add the feature as shown in the Game jam vid of setting our followers favorites? As shown here? http://youtu.be/DGIgXeGC6Dg?t=2m57s

It refers to the followers.

I think its mainly to address that bug where they pull out a hunting bow instead of a higher tier bow.

Hopefully Mage followers can also wear better robes now.

Followers will now equip better clothing instead of merely armor with higher protection; you can now give mage followers better robes, for example.

What you give must still be better than their current gear, though; no female follower in her right mind would wear unenchanted tavern clothes unless her default outfit is cheap and without any armor rating.

Interesting. I hope it means that if I put something I want them to wear or use in battle they'll just do it, no matter their poor choices.

Yeah I guess they would be more specific on if you could 'set favorites'. I do hope though with this is that followers will keep the gear you give them on even after being dismissed.

I sure [censored] hope so, gonna have to test that.

No.

How does the game assess that value? Is it based on monetary worth?

It appears to be in this order: armor rating (for the follower, not you), enchantments, monetary value. That's an assumption: in testing, a mage follower equipped better, more powerful robes, and a follower wearing clothing equipped a more expensive outfit.