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If you took Instant Healing and changed it so that it made each hit act like illusory damage -- i.e., for each hit you take, a second or two after the hit you 'instantly healed' part of the damage, then what you'd have would be a defense that would scale the same way that Resistance and Defense did, and could be balanced against them -- 40% Resistance, 40% Defense, and 40% Instant Healing would all, over time, protect a character from 40% of the incoming damage.
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Can't be done without new tech. Significant new tech. This was one of the ideas I put forward in I3, before I really knew what limitations we have in the system.
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So like, is this a good example of how limited CoH is?
InnerSpike