The way armor works in MineCraft has changed quite a bit since this question was last answered. This is an overview of how armor works in version 1.6.
A player has a total of 20 Defence Points (represented by the little "chestplate" icons above the health bar, where one point is half a chestplate). Each defence point reduces the amount of damage you take by 4%, but only for certain damage types. So, all 20 defence points filled up will reduce the amount of damage you take by 80%.
The type of armor (Diamond, Iron, Gold, or Leather) determines how many defence points are filled up, as well as the durability of the armor (how many hits it takes before the armor breaks).
You can also enchant armor, allowing it to absorb more damage, or even last longer before breaking.
More details (and if it changes in the future, a more up to date answer) can usually be found on the wiki:
This video goes into explicit detail about how the armor stands work in minecraft, including how to /summon, edit with /entitydata, create custom poses and static artworks.
For your specific needs (look like it crawling) you can use commands to set the angle of the head (Head), arms (LeftArm and RightArm), body (Body), and legs (LeftLeg and RightLeg).
/entitydata @e[type=minecraft=ArmorStand]{Pose:{Head:[~f,~f,~f]}{RightArm:[~f,~f,~f]}{Body:[~f,~f,~f]}{LeftLeg:[~f,~f,~f]}}
Note: the ~f relates to the 3 degrees of rotation - x, y, and z; from 180 to -180.
For example, if I wanted to tilt the head forward by 20 degrees, I would use the command
/entitydata @e[type=minecraft=ArmorStand]{Pose:{Head:[20f,0f,0f]}}
Best Answer
This can only be done with a command block.
This will give the nearest player a Leather chestplate with the enchant Unbreaking level 32767 (max) (the Unbreaking enchantment ID is 34) and the lore (thing underneath) will say "May these protect you".