Originally when I was thinking of what to house rule with Microlite I wanted to modify AC to include damage resistance for armour. There was a really good example of this on the Microlite site posted by The Wanderer and in fact I co-opted this (along with strength based equipment mechanics) and worked with it for a while. I really like the idea of separating AC into Defense (Dodge + Blocking) and Damage Resistance - especially for monsters, since it makes it a lot harder to wound a dragon with an arrow (unless you roll a 20 that is). It makes perfect sense that a bear is not hard to hit (DEF 9) because it's a big target - BUT it does have a large resistance (DR 4) to both wounds and pain. I had all the monsters from the purest essence monster lists converted and was gleefully imagining the tough battles my players would have against Orcs with a 4 or 5 damage resist. However, after playing out the numbers a bit I realized that great as it was mechanically, it would really change the flavour of the fights and drag out combat. Most non fighters would be rolling and rolling and rolling and hitting and hitting and hitting before they did even a point of damage. They would be initially happy to be hitting and rolling damage so much - but in the end it would suck hard never dealing out any. Also it was another barrier to using published resources since you would have to guess at the proper AC to Defense and DR conversion and you could really screw with the difficulty by getting it wrong.
So I changed everything back to AC (I kept the minStrength stuff though). I resolved instead to make sure that I treated AC as it was originally intended, and reflect that in my game narration. AC was the abstraction of all the skill, damage, luck, fatigue and psychology in a fight so if your roll was not high enough to match the AC of that barn sized Behemoth - you didn't miss it- your sword skidded off it's poison hide - or you tripped on the rocky ground - or the foul stench drove you back.
The same goes for Hit Points. Instead of trying to rationalize HP as wounds and seeing high level adventurers bleeding all over the dungeon with enough damage on them to down a whale - I resolved to specifically treat HP as a combination of skill and fatigue (mental and physical). Increasing HP every level represents skill at avoiding real harm and having more reserves of energy and willpower to keep going. Falcor the rogue is down to 3 HP, he's bruised and tired and he wants to crawl into a hole. Again it's all in the in game descriptions. This works well with the Microlite magic system too, since spells are draining that mental reserve and making you tired and easier to take down. I saved stat damage for actual meaningful physical damage.
AC and HP always get a bad rap, however I think that this is from years of (mis)interpretation and how the combat is described and not necessarily from the mechanics themselves. Keeping the status quo wasn't the sexy thing to do but I think it was the right thing.
It also makes it a lot easier to co-opt critters and encounters from all those juicy modules out there.