Studded Leather Armor is lightweight body armor which offer better protection against attacks than leather armor. It achieves this with a basic armor class of 7, but it provides extra armor class bonus of -2 against slashing attacks and -1 against piercing and missile attacks, while leather has only penalties of +2 to missile and piercing attacks.
Studded leather 10 lbs heavier in weight and more expensive. For rangers and multi-class or dual-class cleric/fighter thieves, it's the most protective armor which can be worn while still being able to use hide in shadows and thieving skills. This appears in Icewind Dale and Icewind Dale II.
Studded leather armor has little in common with normal leather armor. While leather armor is a hardened shell, studded leather armor is soft and supple with hundreds of metal rivets affixed. The rivets are so close together that they form a flexible coating of hard metal that turns aside slashing and cutting attacks. The soft leather backing is little more than a means of securing the rivets in place.