As we have it, all base armour and weapons follow a natural progression that never falters; unimproved steel ALWAYS trumps iron, Dwarven > Steel, Orcish > Dwarven, etc. This system is tried and tested, and it works, to a greater or lesser extent, in helping the player to feel progression and a sense of accomplishment as they obtain new pieces of armour.
I suggest no huge overhaul to this system; in terms of armour rating/damage, a tiered system must remain consistent: In an ordinary battle, Daedric armour will still be better than Ebony or Dragonbone. I simply speculate that the biggest problem with this is that once the player can craft, or by other means has access to a higher tier of equipment, their current set becomes COMPLETELY obsolete, barring RP purposes.
I propose that all sets of equipment, whilst remaining tiered in the same fashion, should recieve minor bonuses that might cause them to be picked over higher - tiered equopment in certain situations.
For instance, perhaps Dwarven armour and weapons could have 5% extra damage reduction and 5% extra damage (respectively) to Dwemer constructs, Falmer, and Chaurus. In glass, the player could have a 5% chance to glance off the damage from melee and missile attacks. Damage reduction from Dragons, and more damge dealt to them, with Dragonbone. Those spikes on the Daedric armour look nasty - how about a 3% chance of bleeding damage to opponents in melee range? The list goes on.
Thoughts? Comments? Questions?

