Pros:
more classic sit down type hitpoints.
easier for Npcs as they can just say what they are ("you see a group of warriors")
no need for people to worry about what category their armor fits into
less issues with armor/costume safety
new work for the craftsmen (new recipes ie shields) see below
no more heavy crap for me to lug around

less bitching about soak (though it'll stil exist due to low life+cr builds)
Cons:
no reason for anyone to wear armor
less fun for the craftsmen
lowered recovery time
need to re work what shields do (ie maybe lower cr by 3, though possibly countered with a shield that doesn't do this)
those people who would wear armor have less encumberance
I dunno. I kinda like it though it would change a lot of things. I'm not against wearing armor, but it would resolve issues with me getting cold, stiff, and/or sore. I do like the hitpoints move as I think I was one of two people at nero wearing armor, as if I remember correctly the soak is level based while armor is static (skill based?). It'd reduce the need for spending money on phys-reps that can be expensive only to watch them get thrashed as you take a header in the dirt (I almost teared a bit when I put the first ding in the the new detailing).
neat idea but definitely a change. Just thinking on it, it'd be easy to do in a simple chart, just take the lowest armor category (or turn this to a number if you realy wanted and multiply the two together to give more options) and take the additional CR in the box.
ie: (I added the +1 for innate helmets)
light= 4
med= 7
heavy= 10
or
light+light=2
light+med=3
light+heavy=4
med+med=5
med+heavy=7
heavy+heavy=10