While playing last night, I have noticed on a few occasions that Ifan, when shooting the crossbow given to him by the merchant you meet when you escape the fort, does damage to both armor AND health with the same hit.
I'm almost at level 6 and I think I'm starting to get the idea Larian had with the armor system. What they call "Armor" is really configurable HP boosts. While your HP depends on your level and Constitution stat, your configurable HP boost is determined by your gear, and you are allowed (expected?) to fine-tune it before encounters.
To advance in the configurable HP however, you are practically required to spend serious money on gear, or invest heavily into Lucky Charm, and gamble that you'll find good gear in containers -- which is in effect spending points which could have increased your damage, and hope that Larian included good enough stuff in their loot tables to justify you spending those points.
Conclusion, which answers my earlier question about Barter - Barter is a pretty damn important skill in this game. Invest in Barter, invest in your damage output and you should be set, at least during the early game. It's more economically viable to increase your damage output while reducing the cost of your exta HP (money you pay merchants for gear) than it is to increase your chances to win a lottery.
The shop inventory tables are more reliable than the loot tables when it comes to netting you good loot, and if you can push the price down, the long run gains are much higher than what you could win from the lottery over a long number of "gambles" - opening of containers.