Dragons are an extremely reclusive and powerful creature. As such, not much is known for certain about them. Even our stories and legends are more fiction than fact. They seem to like it that way.
Dragons generally live high up in mountain ranges and dwell in large caverns. While rumors abound of vast hoards of gold and jewels that can be found in a dragon's den, not one seeking such a prize has ever returned. Luckily, dragons don't seem to be dangerous if left alone. Only in our most dubious of historical texts is the ever a record of a dragon attacking a civilized area. This holds true even among the Kith who have lived closest to dragon territory.
Dragons aren't completely isolated though. There are many legends of adventurers who simply sought to gain wisdom from a dragon. In these stories, the hero usually succeeds by offering a gift of gold or jewels (probably where the rumors of dragon hoards came from and may still hold some truth), or pass some kind of test. Usually a test of wit or intelligence. It's from these mythical encounters that we can learn the most about what dragons might actually be like.
According to the legends, dragons are large winged reptiles the size of buildings with scales as hard as diamonds. They have the ability to breathe fire and fly at great speeds. Considering the great mages of antiquity that have made the attempt to rob or even slay dragons in the past, it seems likely they have some sort of magical resistances as well. They come in many colors: red, blue, green, gold, and silver. Though these are the ones in the stories from around Berla, there's no reason to believe there aren't more to be discovered high in the mountains by some fearless explorer.
Are dragons even real? An astute question asked by many in Ethalia. Who's to say the stories aren't just that? Recent explorations of the Everglade reveal that the natives of that land have surprisingly similar stories to our own that describe "Great Wyrms", or what we call dragons. There's even a species there known as Wyrmkin that claim to be descended from dragons. Given this new evidence it seems to me that not only are dragons indeed real, but their domain spans multiple realms. Perhaps these Wyrmkin hold the secret to gaining an audience with a dragon and someone from our own age will survive an encounter with one...