I'm playing as a Cleric, heavy armor/shield-- and an important part of a Cleric is armor buffs. So, I happily picked up Alteration and I'm always popping Ironflesh happily before a fight, glad I have the extra 60 armor... BUT, I have no idea what the armor numbers actually mean in terms of damage mitigation.

Does anyone have a formula or something that shows x armor = y damage reduction?

From UESP :

displayed armor rating = (worn armor rating + item quality) * (1 + 0.4 * (skill + skill effect)/100) *
(1 + Custom Fit or Well Fitted + Matching Set) * (1 + Agile Defender or Juggernaut) +
(shield armor rating + item quality) * (1 + 0.4 * (skill + skill effect)/100) *
(1 + Custom Fit or Well Fitted + Matching Set) + armor effects
hidden armor rating = 25 per piece worn
damage reduction% = (displayed armor rating + hidden armor rating) * 0.12

So basically, take the armour rating shown on the Apparel page, add 25 per item, DR is almost 1/8 of that. Your 60 armour Ironflesh only mitigates 7.2% damage, but sometimes every little helps.

[Oh yeah, Ironflesh is 80 armour, so 9.6%]