There seem to be a lot of people who really have no idea how armor penetration works, and are parroting incorrect information. Well, I'm here to clear things up.
This is exactly how it works, and is not up for debate. The formula was posted by GC months ago.
At 100% armor penetration, you do not ignore 100% of the target's armor. That's what the "up to" is in there for. You actually ignore substantially less than that. Depending on level and armor, there is a set amount that can be ignored. Your armor penetration on your gear ignores a percentage of this modified number, not the boss's raw armor value.
Armor debuffs like sunder, however, do act on the raw armor value of the boss. This makes the final amount of armor ignored quite a bit higher, even at 100% armor penetration (in fact, these debuffs become more important the more armor penetration you have).
If you care about the formulas, read on. Otherwise, there's nothing left for you in this post.
The total amount of armor which can be ignored is (boss armor + 16635) / 3. Bosses have 13083 armor these days (I believe this is uniform across all bosses), so we can get a hard and fast rule from this.
Ignorable Armor = (13083 + 16635) / 3 = 9906
So, at 100% armor penetration, you ignore 9906 armor on a boss with no armor debuffs. That leaves 3177 armor still on the boss. How about with sunder and FF for 25% armor reduction?
Ignorable Armor = ((13083 * 0.75) + 16635) / 3 = 8815.75
Wait, that's less armor ignore! Well, yes, it is, but what about the final armor of the boss? Since 25% of the armor was removed by debuffs, that's 8815.75 armor out of 9812.25, or 996.5 armor after penetration. Adding sunders and FF on top of 100% armor penetration knocks off another 2200 or so armor.
So yes, even at 100% armor penetration, you want armor debuffs.