There are a few items that provide damage absorption, but they're pretty rare, and they're generally only for one specific type of damage (like the Belt of Inertia or Horn of Roranach). Helmets will reduce the damage you take, but only indirectly. Helmets make you immune to critical hits... so if an opponent rolls a 20 on an attack, you'll be hit automatically but you won't take double damage. Spells like Armor of Faith will help reduce the damage as well, and the HLA Hardiness can be a life-saver. The Defender of Easthaven will also reduce your incoming physical damage, and so will being a Barbarian (though Barbarians can't wear plate, so it evens out in the end).

Basically, armor in D&D makes weapons "ding" off your armor without doing damage. There's generally no partial damage, you either take no damage or full damage. The better your armor, the more likely you are to avoid damage. It doesn't really make a whole lot of sense honestly, but that's the way the system works, and it works against the monsters just as much as it works against you.

As to surviving, make sure your DEX is as high as possible. 18 dex gives you a -4 to your armor class, which helps immensely. However, if a single unnamed bandit is able to do that much damage to you in full plate, there is indeed something wrong. The ruffian captains have a THAC0 of 9 and two attacks a round (with a shortsword), so in full plate with a decent dex, and wearing a helmet, your piercing AC should be -4 or better. This means he'll hit you a little less than once per round, for 4-9 damage a hit. That shouldn't be enough to really hurt you a lot unless you're playing the game solo and don't have any healing potions. Use your other party members, concentrate fire on the more dangerous enemies first, and make sure to use controlling or disabling spells like Hold Person or Web. Disabled enemies are hit automatically, which is very useful. Also make sure to cast buffing spells before tough fights, and don't neglect class abilities like trap-setting.

You can also turn the difficulty down. At Easy and Normal, you'll get maximum hitpoints whenever you level up, and the monsters will do less damage. That makes life substantially easier, and I always make sure to create new characters on Normal even if I'm planning on playing the game at a higher setting. If an area's too tough, you can always come back later. Most of the game is open starting in chapter 2, but you probably won't be strong enough to kill everything right away. You can run into dragons, for instance, almost immediately after leaving Irenicus's dungeon. You simply aren't powerful enough to fight them until later. Once you get to level 14 or so, dragons and other monsters become substantially less scary.