Dragons are essentially super hounds, hounds with a far stronger breath attack, who have a stronger constitution and strength than an equivalently leveled golem. If you want them as a pet, you definitely must favor an element you're defending against, and for obvious reasons fire and ice are right out. They do not spam their breath attack as much as hounds, but you really don't want to take the chance an ice dragon is going to shatter a potion of potential now do you? (Superb+ Resistances can negate this however.)
All dragons have a very high chance to drop ores, treasure boxes (safes, chests, multiple gamble chests, material boxes, treasure balls, and bejeweled chests), and necklaces. Very rarely, they can drop Treasure Maps as well.
As of Elona+ 1.19 (possibly earlier versions as well) control magic works on breath attacks, and dragons also have the control magic skill, making them decent pets as long as you can engineer some extra equipment slots on them. Getting resistance to the element used by the dragon pet of your choice is still recommended.
As enemies, they are a damn good reason to have a sturdy pet, or one fast enough to avoid being hit, so that you may attack them while they focus on the pets. If your pet is missing, they're also the #1 reason for mid-level adventurers to be packing a rod of teleportation. Due to their high levels they start with near-zero potential in every stat, genes are a must. Warriors may have to run away from dragons longer than magic users depending on their total PV.
If you're feeling cheap and you can't take the breath attacks from the stronger dragon types, blindness is a good way to lower their damage potential dramatically, then use dragon slaying gear and they'll go down much easier. Dark magic can work as well as potions, in a test on an electric dragon with a level 27 performer, a spammed Dark Eye can turn the fight from bias in the dragon's favor, to fighting a cripple. Obviously the same isn't true for dragons with dark resistance.
Types of dragons
This is the easiest of dragons to beat one on one, not that that says much. However his breath attack is still lethal so try and sneak around a corner and engage him ASAP. poison element. Level:32 Physical element (power breath) in Elona+.
Fire breathing level 40 dragon.
Cold breathing level 40 dragon.
Lightning breathing level 40 dragon. Sickly yellow and green color. Pretty much the same as previous two, except for lightning breath and resistance instead of fire/cold. They can paralyze, resulting in quick death for the weak and unprepared.
This is one bad boy. He can wipe out everyone in Palmia numerous times unless Xabi or the arena master spawn with anti-nether equipment, or if all the best hit him at once. It's best just to run until you can kill him in a couple hits if you face one alone, generally you'll find them more common as random book summons, however. He hits a lot harder than his green cousin as well. Seems a little faster too. Dark blue. Level:45
As if just clawing and breathing wasn't enough, this one not only likes his food (you) flavored with confusion, blindness and a bit of poison, but he is also resistant to everything but magic. Dark purple. Level:50