Yalin

I am a bit confused with the armor in PoE. Right now my party consists of 6 people, all level 5 and most are wearing just the armor they had when they were recruited, besides equipping 5-6 rings. Most armor I have found so far seems to be inferior to what each is equipped with already. How bad is the recovery penalty for wearing armor anyways? (Guess I really don't understand the whole recovery thing as it is...) Any help is appreciated. Thanks in advance.