So, aside from looking amazing in general, Challenge mode armors also have additional animations that proc while casting, in combat or doing something else. Some even have different variations depending on what you're doing. In any case, MMO Champ has fixed up some videos showing said procs in action, so let's take a look.
These really will be the hot item for a long while and make Challenge modes really worth getting into. The only problem, of course, might be if everyone has them and they lose some of their uniqueness, but that's always the case with new armor sets.