Edit: As it turns out my concealment item was 20% not 10%. While the text talks about 10% concealment and an anomaly where concealment seems to have doubled, in reality the concealment I had running was 20%. I feel really stupid.
A recent discussion caused me to explore what happens during combat and how the four corners of defense seem to be working in DDO.
As players are aware, a character's defenses are based on four essential elements -- armor class, dodge, concealment and incorporeality. Each of these gives a chance that an attack that would otherwise record as a hit actually ends up as a miss.
In order to test these four corners of defense I took my L25 monk into epic Gianthold and ran through encounters with CR25 and CR26 monsters. I selected this because at CR25/26 the monsters should be "at level" for my L25 character. My expectation was that my armor class would give the advertized defensive protection.
During the test my dodge was 23%, my armor class of 114 gave 67% at level protection, my concealment was 10% and my incorporeality was 10%. I counted 107 (total) attacks from 5 different monsters.
The expected result is 107*.77*.33*.9*.9=22 hits. The actual number of hits recorded was 22. This confirms that the four corners of defense work together to give the expected results for characters fighting "at level" monsters.
Next, I tried to figure out the order in which the defensive elements were checked. The actual number of misses for each of them was 24 dodge, 14 blur, 8 incorporeal and 39 armor class. A straight conversion based on the defensive percentage would lead me to expect 24 dodge, 10 blur, 10 incorporeal and 71 armor class misses. The only one of these that lines up well with the actual results is dodge.
My conclusion is that dodge is the first thing checked.
Reworking the expected results after eliminating dodge misses shows that either concealment or incorporeality ought to give 8 misses. This lines up well with the result from incorporeality.
My conclusion is that incorporeality is the second thing checked.
Now, however, my numbers are way off. The expected result for concealment now drops to 7 but it the number of actual misses was 14. This is twice what I expect. This could be a bug, it could be just random impact from dice rolls. I can't tell. My guess is that concealment is actually giving twice the defense it should.
My conclusion is that concealment is the third thing checked.
That leaves armor class as the last thing checked.
Determining armor class misses is a bit of a challenge because incorporeality caused misses record in the combat log using the same words as armor class misses. To know which is which you have to cross reference the floaty text with the combat log.
Expected results if concealment had gone at expected would be 44 misses due to armor class. The actual number was 39. This, again, could just be the result of random impacts from dice rolls. It could also be the result of facing CR26 monsters during the test which would be slightly above level. If the armor class actually gave 60% defenses (as opposed to the 67% at level) the expected number of misses is 40. If that is the case then it lines up well with the 39 actual misses.
Without additional tests it isn't really possible to know if the concealment result is an anomaly. It is certainly possible.
It is equally possible that the sequence of incorporeality and concealment is reversed. The 14 concealment misses is closer to the 8 expected misses if it is second than it is to the 7 expected misses if it is third. However, being nearly twice the expected number really suggests that either concealment is giving more defense or the test just had a strange set of dice rolls.
I tend to think that the dice rolls were not strange since the sample size is 107 hit opportunities. OTOH, I'm not enough of a mathematician to know if that much deviation should be considered normal.
Anyway, I think it is useful information for players trying to estimate how much effort to put into each of the four corners of defense.