what exactly does this mean? for example, my character has a full plate +1...i think the armor check penalty is -8...what exactly does that mean?

My fighter theif tries to hide in shadows ...

-8 on that skill roll.

My theif has 18 dex, +4 to his ac because of it !

Full plate, max dex bonus is +0, oopsie, your +4 dex bonus is negated.

this is why if you intend to have your fighter/theif wear heavy armor you do not bother with move quiet/hide in shadows or high dex.

In fact, most fighter theives wear only leather armor. (And thus have lousy str, since they blew the points on raising dex).

Decisions, decisions, so many places to spend your char points, but not enough char points to do everything...