OK, quick rundown on what these guys do...
All dragons can either be placed as a normal monster and guard a specific spot or they can be configured to patrol the skies in a set area. They will patrol until they see prey, then at this point they will attack. They will not resume patrol once they attack something. Plan ahead for this behavior. Dragons can be configured to attack other monsters or just players. They can see a long distance too. Dragons that fire projectiles can have those projectiles set to 'seek' if you desire. This makes them VERY deadly since the fired projectile will track you as you try to evade it. This is all configurable and the seeking can be set from casual arc to you-can't-escape. Default sets it to arc in on you but it's possible to evade.
Fire Dragon- shoots flames that light things on fire. Trees, boxes, wooden things, you...it'll all ignite. Some monsters just want to see the world burn. Super dangerous.
Earth Dragon- fires balls of dirt. Sounds easy but turn on the seeking and it gets magnitudes more difficult. Has localized rainfall around it if you want.
Wind Dragon- Air blasts. Can easily blow you off of things into lava, off a high ledge, etc. Play the demo, you'll see. Might add some sonic attack to him too.
Ion Dragon- Fires an ion ball that hits and explodes into a nasty ionic blast.
Nature Dragon- Fires a massive root ball that will spawn all sorts of wildlife. Grasses, forest creatures (some dangerous), dragonflies, butterflies...Has localized rainfall around it if you want.
Ice Dragon- Arguably the nastiest dragon. Shoots an ice ball that can freeze anything it hits. Once frozen you will shatter and it's all over. Has localized snow around it if you want.
Finally I'm BEGGING you not to look at this part until after you play the demo. It's meant to be a surprise and reading this next part WILL ruin it for you. Come back after you play the demo. You'll thank me for this, I promise you. The final dragon is unlike anything and it's different than the others in every way.
Really? You went ahead and looked anyway? Well, I'm not posting anything yet about it. I will in a couple of days. Now go play it and see for yourself.