Am I misunderstanding the Conditioning Perk because sometimes (maybe all the time) when I take my helmet off (RP courtesy thing around non-combatant NPCs) I am overencumbered? Is Conditioning dependent upon 'full set' or is it bugged?

You have to be wearing the full set for the perk to work. Also find the steed stone if your always running into your carry limit

OK, thanks.
I do like the idea of the Steed Stone, but I like the Warrior Stone a little better. :\