ok, Am I reading this right?

for every 2 points over body*2 you lose 1 point agility and reaction(i.e. body 3 loses points @ 8 armor)

also if wearing 2 pieces of armor you only count the higher of the ratings, but you add them together for calculating encumberance(so an armored vest(6/4) under a lined coat(6/4) adds no extra protection, but costs you 4 points of agility and reaction?because you're 12/8 for encumberance?)

You seem to have it, except that the rules specify (or fraction thereof) meaning you round up. (SR4A, 161). so body 3 actually loses its first point at 7 armor.

Generally the only time it is worth layering armor is if you are wearing a high ballistic/low impact piece in conjunction with a piece that is low ballistic/high impact. (In sr3 you got half the second highest piece added as well, but this resulted frequently in double digit armor ratings...).

And of course FFBA is exempt from these rules. But those are about right. And also, Body x 3 for customization.

FFBA is what *really* broke the sr3 rules actually. if you played without it the layering rules weren't too crazy.. playing with it even just the baseline FFBA+Armor Jacket was pretty hardcore.

One of my favorites is full FFBA and the Evo HEL suit. Really easy to get good armor high, with a lot of special environment protections. Your character has to be comfortable with their form though, as both of those are skin-tight (or nearly so).

Oh yes, if you didn't have apply armor degradation rules, someone with a decent Body who maxed out his armor with FFBA couldn't be hurt by anything that didn't fire APDS or in burst-fire.
But I have to admit that I'm sometimes facing the same trouble in SR4, with the ork (hopefully he's not a troll) in security armor being able to shrug off most shots that would severely harm any other team member.