For the exact mechanics surrounding the armor upgrades, I advice people to follow the link in the OP.
I believe the first armor upgrade sets the armor to 4, instead of giving +4.
So a unit with 0 armor gains +4 from the upgrade to a total of 4.
A unit with 1 armor gains +3 from the upgrade to a total of 4.
A unit with 2 armor gains +2 from the upgrade to a total of 4.
A unit with 3 armor gains +1 from the upgrade to a total of 4.
A unit with 4 armor is not eligible for the padded upgrade. Instead the first upgrade they can receive is the chainmail(?) that boosts armor to 6.
From what I've read, that's how it works. I'm not sure though and I advice people to discuss the mechanics in this thread:
http://www.twcenter.net/forums/showt...php?p=12418923
So far people tend to build blacksmiths, but only 1 person prioritizes it over other buildings.
At what turn do you try to specialize a recruitment center? At what turn do you try to have the 2nd tier blacksmith?