Well, read the first sentence of the next paragraph at least. It's important.
There was a rumor floating around a long time ago that resistance only mattered in sets of 50--i.e., if you have 149 FR, it wouldn't be any better than 100 FR, but 150 would be. That's absolutely untrue, as I hope to express, with a little bit of well-stated info elsewhere:
Someone on the EJ forums wrote:Binary spells: Your chance to resist = (resistance / caster level) * 15%
If you have 180 SR and a level 60 casts Fear on you, you have a 45% chance to resist. If you have 181 SR, that's a 45.25% chance.
Damage spells: Average mitigation = (resistance / caster level) * 15%
Now, you can only get a 25%, 50%, 75%, or 100% resist. In that sense, it's tiered. But your effective mitigation is a continuous function, and every point of resist helps a little bit. As you move from 200 resist to 250 resist, you will see fewer 25% resists and more 75% resists, increasing your average mitigation accordingly, for example.
Both are capped at 75%.
Some terms if you're not familiar with them:
Binary spell - A spell with a component other than damage. Frostbolt, for instance, has a slow effect in addition to its damage, and is thus considered a binary spell. They are called this because, unlike normal spells, they can only be fully resisted or fully unresisted (if that's a word). All other spells can be a 0%, 25%, 50%, 75%, or 100% resist.
The formula stated above can be used to determine the chance to resist a binary spell, and also to calculate the total damage you will resist averaged over time. The chance to get a 25%/50%/75%/100% resist is a bit more complicated and I don't remember it off-hand, nor does it really add to the discussion. The important thing is just understanding how much you can expect to resist on average given your resistance and the level of the mob.
Another important point is that the value of (Resistance / Caster level) is capped at 5. That is, for a lvl 70 mob casting at you,
(350 / 70) = 5
Thus, any amount of resistance you have over 350 is wasted against that mob. Note that bosses are considered, for the purpose of calculating resists, to be level 73, which means there's no situation currently in the game where a spell resistance above 365 is in any way useful.
The last point worth mentioning--or, more accurately, bringing your attention to, as it was mentioned already in the post from the EJ forums--is that the formula also means that the most you can ever resist on average is 75%. (From the formula: 5 * 0.15 = 75%) Thus, there is no way in the game to completely mitigate all magic damage from a mob. At the very least, you will average taking 25% of the damage dealt from that school of magic.
Furthermore, as mentioned elsewhere, there are two "rounds" of determining whether, and how, a spell hits. I don't remember off-hand whether the first round is level-based resists or spell-resistance-based resists, but it doesn't matter for the purposes of the conversation. The key point is that in the first round, it determines whether or not the spell will crit. The second round is another chance for the target to resist or partially resist the spell, resulting in crits that are then, for example, 75% resisted, resulting in damage that jumps around on your screen like a crit but does similar damage to a non-crit.
The same double-round nonsense applies to binary spells as well, but it's more hidden due to the lack of partial resists. If a frostbolt rolls a crit in the first round but gets resisted in the second, it just looks like a full resist.
The net result is that both types of spells get the same % of damage resisted over time. The difference is that binary spells will see more full resists than normal spells, whereas normal spells will see more spells partially resisted.
