Rules and Errata

Could I get more details of the problem players have had with this? I assume only cards that reduce damage, change the damage type, or modify what you do when you discard cards for damage can be play (assuming a boon of the same type, if the power comes from a boon, was not played on a check that resulted in the damage).

There has historically been some confusion about how often you can use damage reduction effects. For instance, against the before acting, while acting, and after acting damage from the same monsters. Or a Covering Heavy Shield against all damage taken by a group from an after acting power or Besieged move. Or the Elemental Arachnid, which did a splash of several damage types all at once.

I think the last I heard, the decision was that every single instance of damage was its own event, so damage reduction is at the height of effectiveness.

That's what I heard too. The damage reduction shared limits with any check that caused the damage (if one exists), but each instance of damage against a character could have it's own set of powers played to alter the damage process.