Let's start by clearing up what is not happening. If you were hoping (or fearing) that the game would turn into turn-based combat, a first-person shooter, or FFXI, that's not going to happen. If you were to take away the damage numbers, combat will look pretty much the same as before. Everything about how those damage numbers are calculated will change, however.
For starters, the effects of defense are getting nerfed and hard. To some degree, this is necessary. Those who bother to gear up their characters are surely familiar with the "same level boss critically hits you for 1 damage" phenomenon.
There's a "0.x" exponent in their formula, and it's not clear what x is. Even if the exponent is 1, infinite defense would mean you take about 63% as much damage as having a defense level that matches the attack value. A smaller exponent reduces the effect of defense further. With an exponent of 1, having a defense value half that of your opponent's attack value would mean you take 26% more damage than if your defense value matched the attack value. With an exponent of 0.1, that would be reduced to about 3% more damage.
Next, the way skill damage is computed is being completely redone. Right now, early skills might give you +200 bonus damage, while high rank skills might give you +5000 bonus damage. By the time you're high level, +5000 is still a lot, but +200 is a waste of SP. On the other hand, low rank skills that hit several times can still be tremendously useful at high levels. If your base attack hits for 1500 damage, a skill that offers no damage bonus but hits 10 times now hits for 15000 damage. This means that which skills are still useful at high levels is totally different from which skills are best when you are low level.
This is being redone so that skills will instead give a percentage damage bonus rather than a flat bonus. For example, rather than having a +500 damage bonus, a skill might deal double the damage of your normal attack. That will be double your normal attack at low levels and remain double your normal attack at the level cap.
Skills that hit multiple times can be balanced against single hit skills simply by giving them a smaller damage multiplier. For example, a skill that hits once can be triple the normal damage, while a skill that hits six times can have each hit be only half of your normal damage. It sounds like there will still be some multi-hit advantage due to damage bonuses from gear, as a +50% damage bonus from gear could mean that those 300% and 50% of normal turn into 350% and 100%, respectively. Or maybe the bonus will get spread across the multiple hits.
Third, the effects of your five basic stats is being completely redone. For example, accuracy will no longer be affected by dexterity, but will now be affected by strength, instead. It will no longer be possible to have your basic stats affect your max inventory (as constitution does now), but it will be possible to change your attack speed via dexterity. There are a bunch of other changes, too.
Naturally, the effects of stats from gear is being completely redone, too. Right now, chest and legs pieces give physical defense, gloves give accuracy, and boots give evasion. That often means that you want plate chest and legs because plate gives the highest physical defense, but leather gloves and boots, because leather gives the highest accuracy and evasion.
That's going to be changed so that all four armor slots give both physical defense and magic defense. Enhancement will boost both of these stats, not just one. Plate will give extra physical defense, cloth will give extra magic defense, and leather will give more offense-focused stats. From how hard defense is getting nerfed, I somewhat expect that this will mean that everyone wants all leather, but we'll see how large the stat bonuses are.
Now, this is of course a massive overhaul. In a game that is remarkably stingy about letting you respec your build, that could be a problem. They're planning on having an event when the changes go live that lets you respec once per day during the event. And presumably whatever you respec to will be locked in again when the event ends.
This is likely to discourage people who aren't active during the event from ever coming back, as they'll be stuck with terrible builds and no way to respec out of them. You can redo your skills with an item from the item mall that costs several dollars for one reset on one character. But you can't reset your stat points or your class choices.
They did have an event that gave you a free class respec, and another that gave you a free stat point reset. But it was one per account, and if you had several characters that you wanted to reset, you were out of luck for all but one of them. I expected them to add the items to the item mall after the event, but they didn't.
Hopefully they'll at least have a forced respec on everyone when the event happens. That way, people who come back months later will have the chance to reallocate all of their stat points and so forth into something that makes sense with the new system.