There is a message that comes out on the bottom left of the screen saying: "[xx] point(s) of damage have been absorbed. A total of [xx] point(s) of shielding remain."
BUT your HP still goes down by the same amount that was absorbed...
attached screen shot (this is fighting monster, I can assure you its the same with players):

4 + 3 = 7 damage absorbed, and yet 103 / 110 life left

Archived topic from AOV, old topic ID:5150, old post ID:33191