To add onto what Byanarro said;
The HP bar is the sum of all block's hp atm I believe, and as blocks as destroyed it goes down. At different HP thresholds, you recieve different debuffs to power regeneration and thrust (for example).
When HP hits the minimum threshold (I think it's 10% right now), you are kicked from the core and it starts to overheat. Killing the ship does not kill the player. There is a mechanic to restart systems though; Pressing Y makes the ship enter a reboot, which will reset the health based on the remaining systems and remove the HP related debuffs and overheating, but takes time depending on the % of HP missing and the mass of the ship (Nauv had a reboot of 26 hours on the HODT, so the numbers are far from final yet).
Armour seems to work like a pseudo second shield of sorts. From what I can tell, it's points are the sum of all block's HP*ArmourRating, and it absorbs 50% of all hull damage until it runs out of points. That's 50% is before it takes into account the armour values of the blocks it's hitting though, so the armour points you lose will be more than the block HP if it hits a hull block. As of the current Dev, there is no way to restore armour points though, as rebooting only affects HP.
But yeah, the HP system is going to make things a bit more interesting in combat.