League-of-legends – Shen’s Ki Strike Damage

Runes, as well as items like Sorcerer's Shoes and Haunting Guise offer FLAT penetration (i.e., you ignore up to X) of your opponent's MR.

The "average" champion has a base MR of 30, that doesn't increase with levels. With ~9 MR penetration from runes, sorcerer's shoes are enough to bring that down to basically zero.

The other options are reduction (triggered by champion abilities like Amumu, Ryze, or Fiddlesticks, or the Abyssal Scepter) which actually decrease your opponent's MR (and so stacks with penetration) and % based (the talent and the void staff). Of these, Reduction is the only way one can bring your target's MR below zero.

When a single character benefits from one or more of these, they are applied in this order:

1. Flat Armor/MR Reduction
2. % Based Armor/MR Reduction
3. % Based Armor/MR Penetration
4. Flat Armor/MR Penetration

Some of the above information can also be found in the game mechanics thread on the official LoL forums, here: http://www.leagueoflegends.com/board/showthread.php?t=3287

The answer to your question would then become:

54.36 MR * .85 = 46.206 MR - 8.55 = 37.656 effective MR. (I don't know the formula off hand to convert that to % damage reduced)

LoL has some inconsistent wordings, I'll agree.

Essentially, when you deal autoattack damage to a champion, you deal an additional 8% of their current HP as physical damage.

So if an enemy champion has 1000 HP, you will deal (ATK) + (1000 * .08 ) physical damage to that champion (reduced by armor, normally). This effect wont occur on the same target quicker than once every 6 seconds, BUT you can rapidly switch targets with your autoattack and get that benefit on them over and over again, since it's a cooldown based per target, and not Jarvan himself.