To use Dragons effectively, you need to pretty much prevent them from being hit. There's no way you can allow them to cop a 2000 damage hit, because half your stack is gone right there.
At the end of my recent game I had 12 Reds, 15 Greens and 9 Blacks, as well as Dryads and Hunters. This is NOT for Demonis. As has been discussed, Dragons suck in Demonis due to Demons having fire resistance. I don't consider Demonis to be late game - I am referring to Haas' Labyrinth/Murock.
Dragons can't be your shock troops (i.e. the one that absorb hits) but they do massive damage if used correctly. With Onslaught and Tactics (and sometimes Haste too) they have full range over the map, which allows you to choose exactly how and where they will attack.
RED DRAGON:
I actually like this guy the best because I prefer his special ability to the Black's. This can be very devastating in certain circumstances. The best circumstance of all was against General Karador and his crystal, all of which can be fried with his special fire attack. You can use Gift to get the ability back, and Glot's Armor or Time Back if you are going to be hit/have been hit. With normal attacks they hit two enemies. This is important. You need to attack the weaker enemy to line up with a strong one. With high initiative, you will fly off next turn before the stronger enemy has a chance to hit you. You can also Heal them fully for 1 point of mana (level 3 Healing) so you needn't lose any if you're careful.
BLACK DRAGON:
Awesome resistance, but high leadership and a slightly less useful special ability (flying fire). This still works when used correctly, but I prefer the Red's ability. The other problem with Blacks is that you can't use Healing on them. So they ARE tanks, but you do need to be careful. Time Back is always useful though if you do lose a unit or two.
GREEN DRAGON:
Some people swear by these but I have yet to grasp how good they can be. I prefer the fire attack, although the Target Capture and Mana Drain are excellent abilities. Someone else can explain how to use these properly.
So basically I used to share the opinion that Dragons were overrated and easily killed. Well, they are easily killed, IF you let them be hit. But the whole point of getting better at this game is that you don't want to be hit. This is where Dryads are so damn useful with their Lullaby and Summon Thorns abilities. They make a perfect complement to a team of Dragons.
