How to handle armor and shields

Option 1 -- Bonus Dice

Add additional "Armor Dice" as a bonus to a Stamina Roll where armor would be useful. If they help win the roll, then the armor helped, if they didn't, the armor didn't help. For some added color, use different color dice for the armor and if it was one of those armor dice that actually won the roll (or added successes) then you can incorporate the armor into the narrative.

Downside -- Confusion. Mundane armor (in this example) provides bonus dice to the stamina roll (a demon's Armor ability doesn't), but doesn't shift the damage type down to fists (a demon's Armor ability does).

Option 2 -- Randomized protection

Don't add additional dice to the Stamina roll -- simply designate a number of existing dice with a different color (the number of which depends on the armor in question). In any lost roll, if one of these colored dice is the "stopper" (i.e. the loser's high die that cuts off the attacker's successes) then damage is reduced to Fists due to the armor. If not, then the armor was bypassed. In other words, just like Demon power but with a randomizer which determines when its effective and when its not.

Option 3: "Rated" Armor Stregth

Note that demonic-ability armor only counts up to a certain amount. After that amount, the victories of the attack are applied as normal. If you'd like, feel free to rate armor in the same currency as demonic Power.

Option 4 -- Using the Narrative (probably the 'right' answer)

As a rule, armor counts against most attacks in a Sword and Sorcery campaign (or any other setting in which it is featured), and should always effectively reduce the damage from an attack unless it can logically be bypassed.

Great, but what does 'can logically be bypassed' look like in the game? What about aiming? The main point is that Sorcerer combat does not proceed like this:

Player: I strike at his wrist!

GM: His wrist is unarmored, so his armor doesn't count. (roll roll)

Consider that in Sorcerer combat, all actions flow from one to another, and all the descriptions and gesturing going around establishes tremendous detail to the entire imagined situation. Announced actions use those details that have cropped up.

Let's say an opponent has been making it through a combat largely because he's well-armored. In resolving round X:

GM: He aborts his attack, falls back from your attack, flings out his hand to grab the pole as he falls, and his momentum spins him in a half-circle around the pole.

So in round Y:

Player: I strike at his wrist as he hangs onto the pole! No armor there, right?

GM: No armor there! Awesome!

More on this topic here.