My approach to MDC armor has been to apply the old Armor Points system of 1 MDC point is equal to one AP so that the damage done must exceed the AP, but all damage over the current AP reduces the value of the armor by the damage in excess of the AP. I find this makes the armor durable, but also encourages players to pay attention to the state of their armor as well as be concerned with making sure to get armor patched after combat with more often armor replacements due to wear and tear.
For MDC weapons, I use a Penetration Factor that provides an amount of AP that the MDC weapon ignores, so that when say a C-12 does 4d6 damage with a PF of 50 on setting 1, 2d6 damage with a PF of 25 for setting 2, and does 6d6 damage with no PF on setting 3. This means that if you leave CA-1 armor with 50 AP, that setting 1 will take out the armor fairly quickly, but have a tough time with CA-2 armor unless there is a called shot to the head or an extremity. I'm a fan of the all shots go to the main body unless called otherwise courtesy of military weapons training. Allways shoot center of mass. This also means that Setting 3 hasn't a prayer of doing any serious damage except to the arms, legs or head with special or critical successes.
Another aspect of PF points is that they are additional damage done when encountering flesh. This makes MDC weapons incredibly deadly, and though you said you didn't necessarily want the instant death without MDC armor, to counter that you can, and I have, apply it to armor only. I've also applied it with up to half of the damage done by the weapon to the characters HP as a pass through wound (but found that less than satisfactory to my own tastes). Apply bleeding rules and a need for immediate medical attention. This way combat can be quick and deadly but not to the point of needing a new character after every firefight.
Hopefully this helps.
