How does fire resistance work?

Does 1% Fire Damage Resistance mean that I take 1% less fire damage? If so, would three items that each have "of the Volcano" Base Fire Damage Resistance = 40 mean that with 120% Base Fire Damage Resistance I would be unable to take fire damage because my resistance is over 100%? Then, would the skill Righteous Fire do 0% damage to me because it does fire damage and only do damage to the monsters? I know somewhere in my logic there must be a mistake, but I don't know where.

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Mark_GGG wrote:

Maximum fire (or other) resistance is 75%. You can increase the maximum with certain passives or gear, but will not be able to reach 100%

Just want to add that as of currently, Chaos Innoculation passive provides "Immunity" to chaos damage, meaning 100% resistance. There are several sources of +max resist (passives, flasks, aura, and some uniques), that I expect have an absolute cap of 95%, but if in the future there are uniques that specify "Immunity" to an element then that will add 100% resistance (these might never happen due to balance reasons).

Thank you Mark.