This is my third attempt to make sensible shield rules incorporating both Shield Saves and Shields Shall Be Splintered (and now my own Use Your Helmet rules).
All shields improve armor class by 1 vs. mêlée and missile attacks if they are carried only (not wielded), i.e. if they cannot be actively used to block an attack, but the attack is coming from an appropriate direction. For example, if the shield is being worn on the back, it would improve the defender's armor class against attacks from the rear; or if the shield is being carried normally and the defender is surprised, the defender could benefit from the shield's armor class improvement, but would be unable to actively block any attacks.
If wielded, there is no improvement to armor class, but the wielder may use the shield to attempt to block blows by making a saving throw. Fighters roll their most favorable save; non-fighters roll their least favorable save. A successful save blocks the attack and deflects the damage. Blocking can only be attempted if the wielder is both aware of the attack and in a position to defend against it.
The number of mêlée attacks that can be blocked depends on the size of the shield. Small shields can block one attack per round; large shields can block three attacks per round. A saving throw must be made for each blocking attempt.
The number of missiles that can be blocked also depends on the size of the shield. Small shields can block one missile per round; large shields can block any number of missiles per round (but only one saving throw is necessary). Missile attacks can only be defended against from one direction at a time.
The defender may opt to sacrifice the shield. The defender suffers no damage, but the shield is destroyed by the attack. This tactic may also be used against area effect attacks such as dragon breath, fireballs, lightning bolts, etc.
Shields of normal construction are no defense whatsoever against ballistae, catapults, trebuchets, cannon, or firearms.
Magic shields are effective against all weapons. When carried, they generally improve armor class by +1, +2, or +3 beyond the normal improvement afforded by shields. When used to block, the magical bonus is transferred to the wielder's saving throw. All missiles except cannonballs can be blocked by magic shields (if the saving throw is successful). Magic shields can be sacrificed to defend against any damage-dealing area effect attack or weapon including cannon. (In the case of cannon, the shield is destroyed and the defender is thrown clear.)
Optionally, a magic shield may be sacrificed twice. The first sacrifice nullifies its enchantment. The second sacrifice destroys the shield itself.
[Edit: See Concise Shield Rules for my current perspective.]