Or is it capped to 100? If it is, is there a point to go below 0 armor?
Any time you manage to reduce an opponent's armor to below
0, physical damage will be amplified. There exists a simple formula for the damage multiplier:
damage multiplier = 2 - 100 / (100 - armor) 
For example, at
-100 armor, the damage multiplier is
2 - 100 / (100 - (-100)) = 2 - 100 / 200 =
1.5x. Therefore, an auto attack with
100 AD against a target with
-100 armor (and without the relevant defensive masteries) will do
1.5 * 100 =
Theoretically, as you reduce an opponent's armor more and more, you will approach a
2x damage multiplier. In practice, however, you will rarely see enemies with less than
-30 armor, which gives a
1.23x damage multiplier.
As Hackworth mentioned, it is also possible to have negative magic resistance. (For instance, super minions have
-30 base MR.) Magic resistance uses the same formula as armor for calculating damage multiplier.