I have a lot of different strategies I employ for drakes, it all depends on the class of the character, and their overall level. It is fun, because I like to plan out my stratgy...like a general.

There are no fire based spells that will work on a dragon, they have an innate resistance to that, I assume because it is their "natural element". They breathe it after all.

You will find there are a few creatures like that in the game, for example the moonbeasts. They live on a island in Lost Lake and any ice based spell makes them laugh. Fire based spells work well on them, additionally shooting sparks and poison cloud.
I have played the game for several months and I must say, I think you got the brimstone powder someplace else. I have only had Drakes drop the dragon tooth. They aren't like the Harrowbark walkers in that respect, because you are correct that HWs can drop a couple of kataals. For me, I have had them drop mordis vine and mandrake root.
Rune stones are used to power rune spells. You can read about the different rune spells here:
http://www.gamebanshee.com/dungeonlords/runemagic.php
Sadly, a number of the rune spells are broken, you can read which ones in the sticky located at the top of the DL forum page. I like rune blades for a melee character, and shards of stone is a very powerfull offensive rune spell.
*edit* I forgot to mention that it has been my experience that you can only find the actual rune
spells at a shop. The stones may be found in chests as well as drops occasionally, but I have never found an actual rune spell that way. The shopkeeper with the best stock of rune spells is Grymlock, in the Northern Steppes, although a few of the other shopkeepers (such as the Celestial guild) have a few rune spells in stock.
I see that we are kind of moving off topic for the scope of this thread. If something hasn't been done to death already, you can always start your own thread to ask a question. For example, if you wanted to discuss general game play strategies or whatever, you could conceivably start a thread to do so. This wouldn't extend to killing dragons, because there is already an established thread for that. I mean, I could go on gabbing about stuff, ( I am a gabber

) but I also don't want to move this thread way off topic.