| The -1 makes it harder for the enemy to hit you when the enemy uses that particular weapon type.
There are four different weapon "types": slashing, piercing, bludgeoning, and missile. Certain armors are naturally better against certain weapon types. For example, chain mail can't deflect a club, but it will prevent a knife from penetrating.
As a practical matter, I haven't found that leather armor +1 is innately superior to normal studded leather, or vice versa. As Pellinore pointed out, the real difference is what else you can wear with it - which is a big reason to take the normal studded leather until you find something better. A ring of protection will improve your AC and your saving throws, but you won't be able to wear it with magical armors.
As for wearing bracers with armor, don't bother. It doesn't improve your AC; AC is calculated by taking the AC of either armor or bracers (whichever is better), adding on your magical protections, and then your Dexterity modifier.
The lower the AC, the better. I would recommend that every character have 18 Dex, because that will give them -4 to their AC (in essence, starting them at AC 6, rather than AC 10).
In general, warriors should wear the best armor they can afford or find, with the possible exception of rangers if you want them to scout with their armor on (I'd just wear the best armor possible and take it off to scout and put it back on to fight). You probably shouldn't be wearing leather or studded leather with any character except a thief. Splint mail is quite cheap if you buy with a high-Charisma character, and there are several suits of it available in Easthaven.
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When your back is against the wall... the other guy is in a whole lotta trouble.
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