How does PR work.. exactly? (in General)

So if I unequip my 1.2m nw tattoo I lose 20k PR. So if I equip a 12m nw item, do I gain 200k PR?
Bringing me to my next question, would it be more efficient to have smaller items and fight at the 400k score range for 100% challenge bonus than to have giant items and fight at the 800k score range?
Thanks!
~sS

Everything here should provide you answers to your questions and you should also look at the "PR weight" of the items you are wearing (top left corner - Help - Armor/Weapons and find what you are using) as that will directly affect your PR.

http://www.carnageblender.com/wiki/Game+Statistics

To maximize your rewards, you should fight with the highest amount of PR you can while still maintaining a high challenge bonus. The x on weapons does not add PR, however the + does. Rewards are based on a few things. (Not sure of order, but..) first is your regen range, then your PR vs. your opponents (these establish your base reward). If your PR is higher than your opponent's, then your rewards will be based off of their PR. Your opponent's PR is really a limiting factor, being over it isn't beneficial. Lastly is the challenge bonus, which is your PR vs their score, capping at 100%, which is your opponent having double your PR. You can also get a hidden 5% bonus for fighting clan members.

I did this on my phone so apologies for mistakes.

Thanks guys, very insightful.
Couple more questions, what is regen range? And how do you maximize the base reward? Their PR:Yours, 2:1?

To understand BA regen ranges, check this out:
http://www.carnageblender.com/wiki/Battle%20Allocation

Base reward is based upon your PR and your opponent's PR (whichever is lower). That isn't so important. The important part is finding the balance between having high PR and high challenge bonus.

For the most part, concentrating on maximizing your challenge bonus is the most important part. This isn't true, however, when you are dealing with opponents with 700k score/ 1k MPR and PR. <<< Those characters are a bad pitfall that should be avoided like the plague.

^ Which is all I've been fighting for a couple days, having not realized all of this until now.
Finding the perfect opponents is very time consuming though. And then hitting higher and lower until you find them again doesn't help.
Thanks so much guys! :)
~sS

It's a difficult thing to know about, unless you figure out to ask. I congratulate you for asking x). If you need help with whatever, shoot me a CM!