I always went primarily with the armour class for armour, then looked at other bonuses. However, you do not get hit in the head much (a helmet's chance of blocking is something like 10% IIRC), so the armour class isn't a big deal. The higher AC helmet will absorb more damage if you get hit in the head, while the other will give a bonus all the time. I'd go for the 70 AC, but if you are early enough in the game that 10 HP is a nice bonus, then that wouldn't be a bad choice.
I don't know the formulas used to calculate damage, but your offense and defense are calculated from your agility, and depend on character class. Your chance to hit / be hit are based on agility and character level (I didn't try figuring out the formula used, but there is an example in the topic below). I assume both your character and your opponent's hit percentages and are used during the combat calculations.
differences between classes (minor spoilers)
