i will use a really simple example

say you have 20k health, and you have enough armour to take 50% less damage so you effectively have 40K health,

mark me down if im wrong but i thank im right?

At Tankspot they describe it as;
"Effective Health is the measurement of how much breathing room your healers have to keep you alive assuming all other factors fail -- assuming you do not avoid or block attacks or have a mana shield active. Effective Health is important for tanking heavy hitting creatures because of Murphy's Law -- if you can have long strings of not Dodging an attack, it will definitely happen. Raid tanking, ultimately, is about stability."

I found the info on some weird cached tankspot-page so I recommend you just google "What is effective health" or sumthin like it if you wanna know more.

I was under the impression from the article that "effective health" = a baseline effective health you would need to survive an attack sans avoidance. For example; if a boss can strike you for 25k (armor mitigated) and your health pool is 24k, all the avoidance in the world would not help you if your health could not sustain that attack. The idea is there is an effective health you need to have to survive when a strike eventually does get through.

Maybe I'm not getting it, seems to be a common thread in the community as Allison pointed out.

Actually, the effective health number is calculated BEFORE any mitigation. Bosses hit for massive amounts before mitigation, just ask clothies. Blizzard has to take mitigation into account when they determine how hard a boss' "raw" hit damage is. Effective health is how much "raw" damage you can take without heals before you die.

For example: If a boss hits for 50K before any mitigation (a not uncommonly high number at all) and you have enough armor to mitigate 60% of the damage, then each hit will land for 20K. If you have 40K health, then you can absorb 2 of those hits before you die. That means your "effective" health is two "raw" boss hits, or 100K. Avoidance and cooldowns are not factored into this equation, which is a major problem. High avoidance and a little luck can extend the life of a tank indefinitely, and Blizzard at least recognizes this, which is why so many encounters have unavoidable spike damage, which is why cooldowns are so important.

DK's at first were the best tanks for progression not because of high effective health levels, but because they could reduce even unavoidable damage to acceptable levels without any outside assistance. Being able to reduce three successive buffed fire breaths on 3D without having to ask for a guardian spirit prevented most other tanks from even being considered for tanking that encounter.

In short, Effective Health is a nice metric for determining how many physical hits a tank can eat before he dies, but has little bearing on the reality of tanking due to cooldowns and avoidance. Blizzard recognizes this, as do most of the best tanks and tank theorycrafters, but the vast majority of tanks and forum-dwellers don't understand this and simply cite effective health levels as reasons for tank buffs or nerfs, without even taking encounter mechanics into account.

Your effective health is the number of unmitigated points of damage it would take to drop you from full health to death. At the simplest level that is just based on your health pool and the percentage damage reduction you get from your armor. See this article for some specifics on how that works: http://www.wow.com/2009/09/13/1-local-in-which-he-man-and-eddie-get-pwned/

Effective health is not a constant for a given tank, though. If you pop a cooldown that reduces all incoming damage by 50%, that temporarily doubles your effective health. If you count guaranteed shield blocks from a paladin, your effective health becomes variable based on the number of blocks you would get in (usually 1-3) before dying from full health. The big debate is how to compare effective health between tanks with different kinds of cooldowns. Some people prefer not to count cooldowns at all unless they can be sustained 100% of the time.

Tankingtips.com, run by Vene who is a frequent contributor to Tankspot, has an effective health calculator on the site.

As an example, my EH with 37000 hp and 24500 armor against a level 83 (Raid) boss is 91,949.

That's a nice calculator - although its important not to convince yourself that your health pool and armor are the only factors in effective health. For example, if you tank with a shaman or a priest healing you and they get a crit at least once every 15 seconds, you get a flat 10% reduced incoming damage which works out to an 11% boost in effective health. If you ignore critical details like that, your effective health calculation will be meaningless.

Anything that reduces incoming damage boosts your effective health. You have to take into account talents, self-buffs, buffs from your raid, and (as mentioned above) procs like inspiration/ancestral fortitude if they stay up enough.

I think it's funny in an article about how confusing and misunderstood "Effective Health" is, that the first block of comments is a bunch of very different definitions for it.

In an article about people misunderstanding and misusing a term it'd be awfully helpful for an explicit definition before the history lesson.