I fly a Python with milspec armor, and two 5D Hull Reinforcements. Combined with a 6A Shield, 4A SCB and 2x3A SCB's I have an enormous tank.
In PVP your powerplant almost completely negates the armor. The Pythons powerplant however is most vulnerable from the underside however so if you use turrets like I do it's possible to help reduce the damage to your powerplant by only showing your opponent the top of your ship. If you don't use turrets though this is not easy to do.
Despite the weakness of the power plant, I still fly with the armor tank underneath my shields. When it comes to PVE my shields are strong enough and sufficient enough with the SCB's alone that I can solo any of the SSS', even the one with a horde of hostile vultures. If I make an error and lose my shields, that armor tank is strong enough that I don't even remotely sweat the SSS.
The most constant fire I've taken was while in a CZ. I accidentally friendly fired thanks to a player crossing my turrets line of fire in a manner that appeared intentional. I killed that commander, and proceeded to take a beating from 8 other players who turned hostile, and probably 15 ore more NPC's from both sides. Despite insane mass lock, with tactical manuevering, SCB spam, and an enormous armor tank (740 hull with 50% resists) I managed to last long enough to charge my FSD and escape. However I died due to a bug with "Align to destination" which was verified and refunded upon ticket submission.
Is armor worth it? Not in all circumstances, but when it comes into play, it's very much worth it.
Oh also.... The armor upgrades reduce thermal damage in general, including the damage from overheating your ship. At the minimum it protects your hull. I'm fairly certain it also protects your subsystems but I am not completely sure.
EDIT: Thought it should also be prudent to mention that a 3 player wing of Vultures that were actually intelligent and targeting the powerplant took me out by themselves in under 5 seconds. So do NOT think that this armor makes you godlike, because it doesn't. Learned that the hard way.