Monster heroes can equip weapons, shield, items, but not armor, as far as iv seen myself, if i mod it, i belive i can get the darkling to wear anything a normal hero can wear, but not going to do it, until 1.1 or later patch or perhaps not at all 
also, if you equip a weapon on the cave bear(ie), it wont show up, but it will upgrade his attack, not tested this in length, but when i did it, it did not show any wierdness, i belive you can also marry the cave bear ..hehe, but not tested that
Im in the prosess of finetuning the xml .. but as it is now it should work fine with 1.08.037