In FO2, almost always if someone has a weapon and you kill them the weapon will be on the ground. This is not true for armor though, because someone with metal armor appearance isn't actually wearing the armor, instead they have their damage resistance/threshold set equal to the armor they appear to be wearing (this is set using the "armor stamp" button in the mapper critter proto editor). I believe they actually do need to have them, but they can be generated by script or by the engine. In the worldmap.txt for random encounters you can specifiy ANY item to be given to a critter. I have changed all of those to use new weapons, have stimpaks, other loot etc. There was another thread on this recently. In the above mentioned random encounters I usually added the armor to the critters inventory so it would be lootable. I have found that its just too many armor to be looted, which is probably why they usually leave armor out of inventory in FO2. In FO1 you could usually loot the armor, so they must have added them to inventory. Regarding the damaged armor idea, we have talked about having two items for each armor (good and damaged), and if you loot a dead person you get the damaged one, but if you have an armor repair perk you might be able to fix it, or you could take it to a shop to get it fixed for a fee. I might add this in a future rev though its a pretty low priority. I'm more interested in new items, critters, quests, and dialog. Also, we're planning to add southern CA and aged FO1 locations, so no lack of things to work on.