Armor is used to reduce the damage taken from a physical attack. It also has statistic modifiers on it that further enhance the character. What type of armor to wear depends on what you are trying to make the character into.
Cloth, Leather, Or Mail
Shamans have the ability to wear cloth or leather armor right away. At level 40 they can train to use mail armor. At low levels, you are going to want to use leather armor whenever you can. Once you hit level 40 and can use mail, you should move up to mail armor for all your armor. Once you get to level 58-60 you should start considering where you want your shaman to end up. This is when “down-grading” to a lower armor type will begin to happen. There are times that a cloth piece of armor will have better plus to spell damage, or plus to healing than a piece of mail armor does.
Elemental shamans and restoration shamans will commonly switch to this better piece of armor giving up the actual armor attribute for these other pluses. Enhancement shamans should never “down-grade” armor. Enhancement shamans are constantly being hit by opponents and need all the armor they can get. Considering that enhancement shamans seldom use their shields, they don't get that added armor class, thus good mail armor is important.