If the hit is a crit, it's a crit: standard rules apply. If the arrow still gets through, you take damage no damage deduction involved.

If your character is being targeted by an elf with a bow, you really want your armor to deflect the arrow therefore armor increases 'defense class' / 'armor class'. I think it really comes down to how you're getting hit: missile or melee? Most of the treatments I've read tend to be rather convoluted. I know this had been debated to death across the multiverse but I got to thinking about the old 'armor-as-damage-prevention-vs-damage-reduction' question.