As of AH1 (I haven't tested AH2), you could see penetration flashes on enemy vehicles, but you would do no damage. I assume this is modeling shells that have enough energy to do a 'partial' penetration-in other words, they defeat the armor, but it costs the shell ALL of its energy, and the shell did no damage whatsoever to the vehicle or crew.
AH1 gv modeling also had a damage threshold that you had to reach before the area you were penetrating took damage. Typically, if you recieved damaging penetration hits from longer ranges, it took more hits to destroy the section you were hitting, be it the engine, turret, or main hull.
Once again, that is as of late AH1, so this may have changed somewhat.
Hope that helps.
