Armor cap is 49905.
Damage Reduction formula is %Reduction for 83 = (Armor / (Armor + 16635)) * 100
Chart assumes a 10k hit to make the math cleaner.
Armor doesn't scale linearly.
Armor Dmg DmgOld DmgNew Difference
10000 6250 5710 5625 85
24000 4100 3600 3690 -90
40000 2940 2500 2646 -146
42000 2840 2500 2556 -56
43200 2780 2500 2502 -2
49905 2500 2500 2250 250
The first column is the targets armor.
The second being damage taken assuming no Inspiration or other DR buffs.
The third is damage taken under the +25% armor version of Inspiration.
The fourth is damage taken with new Inspiration.
The last column is the difference is damage taken, with positive numbers indicating new Inspiration does more damage reduction.
Old Inspiration stopped having an increase affect at around 40k armor due to the buff raising the target above the armor cap. Thus causing some of the buff to be wasted.
New Inspiration continues to work even at the armor cap. It scales better. That is why new Inspiration is better. As old Inspiration would have been next to useless by Icecrown. If not useless than at least not a good place to put 3 talent points since a good chunk of it would have been wasted.