does anyone know exactly how it works though?
if a sword has 100% toughness does it mean it's indestructable or just 100% less likely to be damaged?

I think you're close to the mark, Orion; everytime an item would receive damage, it makes a roll against its toughness to determine the outcome. For example, if an item has 50% toughness, and it would receive damage, another roll is made; if that roll is 50 or less the item takes no damage.

Is that just me, or is there no explanation in the manual?
Some item descriptions contain the line "Tough: x%", and while I am sure that the meaning will be pretty obvious once explained, I don't understand what it means. ;( (e.g. Dagger, Tough: 25%)
Does it tell me that using the dagger reduces my toughness? Or is it just tough to use?
Not every item description includes such a line... that seems to indicate it only applies to a few items.
Any hints appreciated.

TIA, confused, LabRat.

p.s.: Yes, I already RTFMed... but that left me none the wiser.

makes it more durable
less repair needed