Now
 that we know where Dragons came from one can see how the myths and 
legends they appear in influenced Fantasy literature. An influence which
 began, as ever, with the great J.R.R. Tolkien. Before I go on, if you, dear reader, have committed the criminal act of not having read The Hobbit then do so now because otherwise you will run into SPOILERS here. 
Now
 then, while who does Dragons best in Fantasy is an open and subjective 
question with no answer, Tolkien set the original standard with Smaug, 
the greatest fire-breathing Dragon of the Third Age who overran the 
Dwarves of the Lonely Mountain and the humans of the adjacent realm of 
Dale, claiming the treasure of the mountain for himself. As one can see 
from the picture (drawn by Tolkien himself) and his bloody habits, Smaug
 the Golden is inspired off of European Dragons, yet is far an away 
smarter per his unforgettable conversation with Bilbo in which the brave
 Hobbit identifies himself with many riddling, yet not untrue, names."This
 of course is the way to talk to dragons, if you don't want to reveal 
your proper name which is wise, and don't want to infuriate them by a 
flat refusal which is also very wise. No dragon can resist the 
fascination of riddling talk and of wasting time to trying to understand
 it." - J.R.R. Tolkien, The Hobbit
Hardly
 the description of a classic Western Dragon, none of whom were known 
conversationalists, with the single exception of Fafnir from the late 
Norse versions of the tale of Sigurd. As said Tolkien, "Fafnir in the late Norse versions of the Sigurd-story is better; and Smaug and his conversation obviously is in debt there."
 That being said, Fafnir cannot even be called the exception that proved
 the rule of his race since he began his life as one of Dwarf-king 
Hreidmar's three sons. I am sure Tolkien appreciated the irony of this 
fact, and all the more so since I have little doubt that Fafnir's 
behavior may have influenced Thorin's as well to a degree, but then, 
Dwarves and European Dragons both suffer from a lust for gold that 
Tolkien names the Dragon Sickness. Anyway, the point is that Fafnir was 
not a natural-born Dragon and thus hardly counts as an example of an 
intelligent Western Dragon. The quintessential member of that 
unenlightened species would be the likewise treasure-hoarding one from 
Beowulf, who Tolkien was far from fond of: "I find 'dragons' a 
fascinating product of imagination. But I don't think the Beowulf one is
 frightfully good. But the whole problem of the intrusion of the 
'dragon' into northern imagination and its transformation there is one I
 do not know enough about." Another irony there, that the man who 
claimed little scholarly knowledge of Dragons ended up writing the first
 Old Worm in a whole literary genre. Yet while Smaug the Chiefest and 
Greatest of Calamities may have been based primarily in Fafnir, from a 
strictly Dragon-lore perspective his intelligence is far more in keeping
 with an Asian Dragon, though it is naturally soured by typical European
 Dragon behavioral characteristics.
 Meaning that J.R.R. Tolkien created in effect a whole knew type of 
Dragon that, lust for gold notwithstanding, can be succinctly described 
as a Dragon with a Western-style physical form and non-Divine nature 
coupled with Eastern-style intelligence.
This Fantasy Dragon, as I will call it, began and remains the classic of the genre in books and games alike. Dungeons & Dragons came by its name honestly, and here are a list of books in which Dragons feature as important plot elements/characters:
The Earthsea Cycle by Ursula K. Le Guin 
The Inheritance Cycle by Christopher Paolini 
Dragonworld by Byron Preiss and Michael Reaves 
The Dark Lord of Derkholm by Diana Wynne Jones 
The Silmarillion by J.R.R. Tolkien 
A Song of Ice and Fire by George R.R. Martin (as much as I hate to use this as an example, GRRM's usage of Dragons cannot be ignored)  
The
Seraphina series by Rachel
Hartman 
The Annals of Drakis by Tracy Hickman
Handbook for Dragon Slayers by Merrie Haskell  
The Harry Potter series by J.K. Rowling
The Cygnet Duology by Patricia A. McKillip 
And then, of course there all those masterworks that I have somehow not read (yet), such as The Dragonriders of Pern by Anne McCaffrey.


Indeed,
 Dragons possessing the Eastern Dragon ability to take human form is now
 almost commonplace, such as Haryman's The Seraphina series, Fire Emblem
 games, and D&D, and McKillip's The Cygnet Duology. Fire 
Emblem even
 takes it a step further by having many of the gods be Dragons. The left
 is Tiki, princess of the Divine Dragon tribe whose alternate form is a 
silver-white Dragon. She likes sleeping in, gets lonely easily, 
treasures her friends above all wealth, and spend most of her time in 
human form. In all honestly, Fire Emblem's Dragons are some of the 
finest, deepest, I have ever seen, flawlessly blending Asian-style 
high-mindedness with Western-style animalism. Such 
Dragons-in-human-form, saarantras as they are called in the Seraphina books,
 are absolutely fascinating in that they show their non-human 
qualities/mindset while in human form, having an outsider's observation 
and insights into the human condition. The overall point being that, 
when dealing in Dragons, Fantasy authors seldom simply pick whether 
follow a more Eastern or Western influence. I have often said that nobody, but
 nobody, does Dragons like Ursula K. Le Guin, because, in the 
Archipelago, a dragonlord it is not someone with a mastery of dragons 
but rather one whom the dragons will speak with, and Le
 Guin directly said that it took her a while to find her Dragons. 
Indeed, she stated that she drew influence from Smaug, Pern, and Eastern
 Dragons.
|  | 
| Valyrian dragonlords. (Art by Magali Villeneuve) 
 | 
Very rarely do Fantasy authors these days employ the animalistic, speechless European Dragon, the most notable and, in my mind, poetic and not unsurprising exception being George R.R. Martin's A Song of Ice and Fire where Dragons were made into weapons of war by humans, the dragonlords of Old Valyria being  brutal and shameless warlords and slavers who controlled
 Dragons with sorcery. Tis hardly a shock that GRRM corrupted even the 
mighty Dragon, since he tainted everything else. Sure one could rightly
 point out that Smaug the Golden was hardly a paragon of virtue, but it 
is safe to say, I am sure, that he would look upon Balerion the Black 
Dread with contempt for letting a human control him. And yes, I am well 
aware that GRRM is hardly the only Fantasy author to utilize Dragon 
Riders, but in all other examples that I am aware of, chiefly and again Christopher Paolini's The 
Inheritance Cycle, Dragons and Rider are equal partners who regard 
each other with unconditional love transcending all familial bonds. 
Meaning that, while Saphira and Smaug would surely scoff at each other, 
both 
would doubtless look down upon GRRM's Dragons. The picture above says it
 well enough for, though I admit it is only a hatchling and that perhaps
 this is petty of me, I find the image of a Dragon sitting on human's 
shoulder like a parrot would a pirate captain offensive; though I 
suppose it is appropriate seeing as the morality of the average Valyrian
 dragonlord was approximate to that of a corsair captain. That said and 
in the interest of fairness, GRRM does have one truly masterful quote 
which I will give now: "Once a man has seen a dragon in flight, let 
him stay at home and tend his garden in content, someone had written 
once, for this wide world has no greater wonder."
Why do I not mention Robert Jordan's The Wheel of Time?
 Simply put, because there are no Dragons. Rather, "Dragon" and "Dragon 
Reborn" are titles for the champion of the Light against the Dark One. 
Yes the Dragon Banner depicts an Asian Dragon and Jordan certainly 
imbues the title with the critical cosmic importance consistent with 
Eastern Dragons, but the Dragon and Dragon Reborn, Lews Therin Telamon 
and Rand al'Thor, are human.
Do
 you understand that you must always fail, as long as your goal is not 
truth, but guidance? That as long as you seek dragons around you, you 
will never become the dragon within you? - Sarkhan Vol